Judge Augustine Paul said Mr Anwar's statement that he was the victim of a political conspiracy was inadmissible in court.

On the second day of his testimony, Mr Anwar accused his political opponents of carrying out a smear campaign.

David Willis in Kuala Lumpur: "Anwar Ibrahim went on the offensive"

He said close confidants of Prime Minister Mahathir Mohamad had plotted to oust him by circulating letters accusing him of sex crimes.

He singled out recently appointed Finance Minister Daim Zainuddin, Domestic Trade Minister Megat Junid Megat Ayob and Dr Mahathir's political secretary, Aziz Shamsuddin.

Mr Anwar: Says conspiracy brought him down

Mr Anwar's defence team had always said that their case hinged on evidence that he was the victim of a conspiracy at the "highest level" of government.

In his first day on the stand on Monday, Mr Anwar said he was ousted and jailed to prevent him exposing corruption in the highest levels of the Malaysian Government.

The judge ruled on Tuesday that any evidence pointing towards a political conspiracy was irrelevant - although Mr Anwar's lawyers are allowed to try to prove a conspiracy by police.

Sex accusation retracted

Prime Minister Mahathir Mohamad: "The defendant has nine lawyers"

In a separate development, a man who accused Mr Anwar of sodomising him has denied ever having sexual relations with the ousted deputy prime minister.

Mior Abdul Razak, a fashion designer, has filed an affidavit saying police forced him to make false confessions. He is now thought to be in hiding having escaped from police custody.

Three out of five men who originally confessed to sexual intercourse with Mr Anwar have denied their statements, and a fourth has made widely conflicting claims.

Mr Anwar's wife - Wan Azizah Ismail - said in a statement that abuses of power by elements within the police must stop.

Mr Anwar faces four charges that he abused his government position to try to cover up allegations of sodomy and adultery. He faces separate charges in connection with the alleged sex acts.

Charges denied

Mr Anwar was sacked in September 1997 by Dr Mahathir, who denounced him as morally unfit to rule. Mr Anwar has denied the charges and is suing Dr Mahathir for $26m for slander.

The government has alleged that Mr Anwar interfered with a police investigation of the letters at the centre of the case.

Mr Anwar's wife: Leading the reform campaign

The former deputy prime minister has been accused of ordering policemen to intimidate two people whose allegations about his sexual conduct formed the basis of the letters.

In January, the trial judge ruled that government lawyers did not have to prove Mr Anwar had actually engaged in the illegal sex acts described in the letters, but only that he abused his power by ordering a cover-up.

Mr Anwar insists the allegations against him were fabricated to quash his challenge to Dr Mahathir's 18-year leadership.