Wan Azizah Ismail, president of the new National Justice Party (Keadilan), appealed to opposition groups to unite to oust Prime Minister Mahathir Mohamad.

A speech was read out on behalf of Mr Anwar who is in jail awaiting a verdict on four charges of misuse of power.

According to the leadership of the National Justice Party, he will not join the party, but remain aloof so he can forge an opposition coalition to fight the next elections.

Frances Harrison in Kuala Lumpur: "Mr Ibrahim's wife has been catapulted into politics"

"Political parties and non-government organisations must work together and set aside their differences in order to free Malaysia from (its) continuing stranglehold of crisis and oppression," Wan Azizah told a cheering crowd of about 3,000.

The crowds chanted "reformasi", the slogan of the political reform movement, and booed whenever the prime minister's name was mentioned.

Other key personalities in the party are Chandra Muzaffar, a wheelchair-bound critic of Mahathir; Tian Chua, chairman of the Coalition for People's Democracy; and Marina Yusuf, a former supreme council member of the ruling party Umno.

Anwar statement

Mr Anwar thinks he is going to jail

In a speech read out on his behalf, Mr Anwar said the establishment of the National Justice Party represented a new dawn in Malaysian politics.

He said he had been thrown out of the governing coalition because of his opposition to corruption and crony capitalism.

BBC correspondent Frances Harrison, reporting from Kuala Lumpur, says that if the coalition were to win elections, one of its first tasks would be to ask for a royal pardon for Anwar Ibrahim so that he can become prime minister.

Frances Harrison in Kuala Lumpur: Thousands witnessed the launch of the new party

According to analysts, Keadilan could provide a credible third force after Dr Mahathir's governing Umno party and the Islamic PAS party.

But our correspondent says there are still doubts about whether the different opposition parties can unite and concern about Dr Wan Azizah's lack of political experience.

The National Front has 167 seats, PAS seven and the Democratic Action Party nine seats in the 192-member parliament.

Verdict expected

Mr Anwar is on trial for misuse of power - his trial ended on Thursday and the verdict is to be delivered on 14 April.

Before he was sacked, arrested and beaten in police custody, Mr Anwar was the rising star of Malaysian politics.

Groomed as the country's next leader, he said he loved the prime minister as a father.

After five months of lurid courtroom drama, the two men are bitter enemies, locked in a struggle for power that split the Muslim-Malay community down the middle.