Malaysia Denies Holding Talks With Opposition

Malaysia has been plagued by political turmoil since a general election in March.

Malaysia's government denied opposition claims on Tuesday that the two sides were holding talks to resolve the country's political crisis ahead of opposition leader Anwar Ibrahim's trial for sodomy.

"That is the craziest report I have ever heard," Prime Minister Abdullah Ahmad Badawi told reporters. "There is no meeting with Anwar's people."

Tian Chua, information chief of Anwar's Parti Keadilan Rakyat, said earlier on Tuesday the opposition had opened talks with the government via a third party on the political impasse.

"We managed to break through in some discussions through a third party and soon a direct negotiation will happen between Abdullah and Anwar," he said.

The claim came on the day the Anwar-led opposition alliance had demanded parliament be recalled from recess to hold a confidence vote in Abdullah and a day before Anwar was due in court on sodomy charges.

Malaysia has been plagued by political turmoil since a general election in March, when the opposition won power in five of Malaysia's 13 states and denied Abdullah's coalition a two-thirds majority in parliament for the first time in 40 years.

The prolonged political uncertainty has helped hammer Malaysian assets. The stock market was down nearly 30 percent this year even before the latest turn in the U.S. credit crisis devastated Wall Street.

Analysts said the political battle could drag for months.

"It will not end unless the two sides sit down and talk," said political analyst Khoo Kay Peng. "Abdullah should resolve this once and for all."

"I think it will bode well for the confidence of businesses and investors who are pulling back not knowing what's going to happen," Khoo said.

One of Abdullah's political secretaries dismissed Chua's claim as "rubbish."

"You can't lie to all the people all the time," said Alwi Che Ahmad referring to Anwar.

Anwar's three-party opposition alliance has been piling pressure on the Barisan Nasional government, which has ruled Malaysia for more than 50 years since independence, since it scored its best-ever election result in March.

Inflation, economic uncertainty and rising resentment over corruption and privileges given to majority Malays fueled the voter backlash.

Anwar has said he has convinced enough MPs from the Barisan Nasional government to switch to his side.

Anwar's alliance holds 82 seats in the 222-strong parliament. The 13-party Barisan has 138 seats after two of its MPs quit the coalition and declared themselves as independents.

Anwar, once the political heir apparent to former prime minister Mahathir Mohamad, is fighting what he says are trumped up charges of sodomy for a second time after being jailed on that charge and for corruption in 1998, both of which he denied.

If convicted, Anwar can be jailed for up to 20 years.

He told London's Telegraph in an interview published on Tuesday he was not ruling out the option of asking the king to intervene to resolve the political crisis.

"We have a problem here because we have the numbers but we can't move," Anwar was quoted as saying, referring to his inability to prove his majority while parliament is in recess.