Incoming Malaysia PM promises to fight, reform

Malaysia's incoming prime minister promised on Saturday to reinvigorate the country's ailing ruling coalition and take the fight to the opposition as he readied to take power.

Najib Razak, 55, defended himself vigorously against what he said were "malicious" opposition lies that he was involved in the murder of a Mongolian model, an issue that has dogged his ascent to power in this Southeast Asian country of 27 million people.

He faces an immense challenge in taking the helm of a government that is still reeling from charges of corruption and huge losses in last year's elections, and as Malaysia faces its worst recession since the Asian financial crisis a decade ago.

"We were nearly rejected by the people. Recall that we were nearly ousted ... that the power of the people determines our rise and fall," Najib told the annual meeting of the United Malays National Organisation (UMNO), the country's largest party.

Earlier, outgoing Prime Minister Abdullah Ahmad Badawi said he would tender his resignation to the country's king on April 2, opening the way for Najib, who became UMNO president this week, to take office.

UMNO is the lead party in the National Front coalition that has ruled Malaysia for 51 years since independence from Britain. It had its worst-ever showing in national and state elections last year, losing over a third of its seats in parliament.

Najib's chances of increasing party unity were boosted by the appearance of former premier Mahathir Mohamad on stage with him and Abdullah, the trio raising their hands together in salute.

Mahathir, who ruled Malaysia for 22 years until 2003, had sniped incessantly at Abdullah, resigned from the party, and said he would not rejoin UMNO until Abdullah was gone.

"Tun Mahathir's presence indicates there could be a closing of ranks," Najib told a news conference, using the highest Malaysian honorific.

NO HONEYMOON AND QUESTIONS OVER CHARACTER

Najib will face an immediate electoral test in a parliamentary by-election and two state seat elections on April 7. He sought to downplay their significance, saying the only true referendum would be in elections due by 2013.

He also took a stronger line than Abdullah in attacking former deputy prime minister Anwar Ibrahim, who was kicked out of office in 1997 and later imprisoned on what Anwar says were politically motivated corruption and sodomy charges.

"The odd thing is there is this person who once occupied a seat in the government but now, after becoming the opposition, he is suddenly considered pure as an angel and as pure-white as a new-born baby," Najib said to loud applause from 2,500 delegates.

Anwar is again in court on a sodomy charge that he denies but which could see him jailed for 20 years if he is found guilty, which would effectively end his political career.

The opposition says the government is using the courts to prevent Anwar from taking power and charge that Najib is unfit for office due to what they say are his links to the lurid killing of the model, rumours of which have circulated on the internet.

"They are malicious, baseless lies. I have given my reply but they persist because (of) the opposition ploy," Najib said.

By David Chance and Bede Hong

KUALA LUMPUR, March 28 (Reuters)