The Malaysian Prime Minister, Mahathir Mohammed, says his country will try to avoid repatriating the estimated two-million migrant workers within its borders, despite the continuing economic crisis.

Dr Mahathir was speaking after talks in Jakarta with President Suharto of Indonesia, where most of the workers come from.

Indonesia had expressed alarm at the prospect of a vast influx of returnees, at a time when its own economic problems are expected to lead to a sharp rise in unemployment.

Dr Mahatir said Malaysia would try to transfer the migrants to areas, such as the plantation sector, where they could find new work; last week he had warned that many could face expulsion. Another country, Thailand, facing similar problems has already announced that at least 300,000 foreign workers will be sent home.

The summit in Jakarta came just days after President Suharto signed a strengthened programme for economic reform with the International Monetary Fund, in return for a rescue package.

Following the deal, share prices in Indonesia rose 7% on Friday as the the rupiah gained in value against the dollar.

In December the Malaysian Government announced new measures to try to restore international confidence in its currency after heavy losses on the financial markets.

The Deputy Prime Minister, Anwar Ibrahim, said the government was cutting spending and squeezing credit to restore investor confidence.

The government slashed its estimate of 1998 economic growth and agreed to across-the-board spending cuts that would help the economy cool down.

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