Malaysia awaits leadership decision

Stocks tumbled in Malaysia at the shock announcement

Malaysians are anxiously awaiting a statement about the future of Prime Minister Mahathir Mohamad after his unexpected resignation at the weekend.

The confused political situation arose when Dr Mahathir said he was stepping down from the ruling Umno party's leadership on Saturday, before apparently being persuaded to withdraw the resignation an hour later.

You can rest assured the prime minister will come back as prime minister

Rafidah Aziz, minister of international trade

Umno's supreme council is to discuss the issue at a meeting which is due to begin at 1600 (0800 GMT), after which Deputy Prime Minister Abdullah Ahmad Badawi will address the nation to clarify the situation.

Sources close to Dr Mahathir told the Reuters news agency that the prime minister, who has been in office for 21 years, is likely to stay on until late 2003 in a deal hammered out with party elders.

Keeping silent

"Abdullah will unveil a succession plan. Under the plan, Mahathir will stay on for 15 months before handing over his powers," a source close to senior government members said.

"I was told that he would stay until the OIC (Organisation of Islamic Conference) leaders' meeting," another senior party member said on condition of anonymity. The OIC meeting is in September 2003.

Dr Mahathir wept as he resigned

Dr Mahathir is now on holiday in Italy and has not spoken publicly since the weekend, leading to speculation in Malaysia that his notice to quit was either a political tactic or the first step in a transition of power to his deputy.

The uncertainty triggered falls on the Kuala Lumpur stock market on Monday.

Newspapers carried calls for Dr Mahathir, 76, to stay on, though some commentators hinted that the episode may have been stage-managed to shore up his support.

Confusion

The sense of confusion was compounded by the death on Sunday of the head of Malaysia's fundamentalist Islamic opposition party, Fadzil Noor.

The 65-year-old died without regaining consciousness after a heart-bypass operation nearly two weeks ago, his Parti Islam SeMalaysia (PAS) said.

Fadzil was seen as a moderate in his party

The party - which holds 27 of Malaysia's 193 federal parliament seats and controls two out of 13 states - had already appointed its Deputy President Abdul Hadi Awang to stand in during Fadzil's illness.

Umno has seen a recovery in popularity as support fell away from the Islamic PAS in the wake of the 11 September attacks on the US by Muslim extremists.