1MDB issue to hog Parliament as it returns next week

Najib's tight grip on his United Malays National Organisation (UMNO) party has kept him in power despite public anger over alleged graft and financial mismanagement at strategic investment fund 1Malaysia Development Bhd (1MDB), whose advisory board the prime minister chairs.

But that grip appears to be loosening, and his position could become precarious if he loses some crucial upcoming votes in parliament.

Some senior leaders from UMNO, including former deputy prime minister and Najib's potential successor Tan Sri Muhyiddin Yassin, joined forces with influential former premier Tun Dr Mahathir Mohamad on Monday to criticise Najib and call on party members to "speak up" against wrongdoing.

Although they stopped short of openly calling for Najib's resignation, the group may have opened up an opportunity the opposition in seeking to exploit through a no-confidence vote in parliament next week.

"We have decided in principle to move a no confidence motion in parliament," said Tian Chua, a member of parliament and National Vice President of opposition party PKR.

"We will definitely need to collaborate with some leaders from the ruling coalition. But now there is an opportunity to put aside other interests and focus on saving the country and the people."

A no-confidence vote is seen as having a slim chance of outright success given the opposition bloc is about 25 seats short of the majority needed to carry the motion. Even if it gets the numbers, the speaker of the house could reject the motion, stopping it from being tabled.

But Najib is also facing crucial votes on his annual budget and Malaysia's membership of the Trans-Pacific Partnership trade deal which, political sources say, faces resistance from his own party as well as the opposition.

Losing either of those votes would significantly weaken Najib's position.

"There are many ways of objecting....even if the house rejects Najib's budget, that would mean a no-confidence against the Prime Minister and it would seriously damage his stand," said Wan Saiful Wan Jan, chief executive of the think-tank Institute for Democracy and Economic Affairs (IDEAS).

Najib has responded to the UMNO members turning against him by saying his opponents are trying to destabilise Malaysia and hinder its peaceful development.

"Do not allow anyone to be in cahoots with internal and external parties to destroy what we have achieved so far," he was quoted by The Malaysian Insider as saying during a speech on Wednesday.

The issue surrounding Najib erupted in July when it was reported that Malaysian investigators looking into 1MDB found nearly $US700 million was transferred to bank accounts in Najib's name. Reuters has not been able to verify the report.

Najib has denied taking any money for personal gain while the country's anti-corruption commission (MACC) said the funds were a political donation.

But Najib has failed to stop questions about the money flows, while several investigations into 1MDB, which has run up debts of close to $11 billion, are still ongoing.

Last week Malaysia's royal rulers made an unprecedented statement saying the government's failure to give convincing answers on 1MDB may have resulted in a "crisis of confidence".

The country's central bank has called for criminal prosecution against 1MDB, though the call was rejected by the Attorney General. Investors are also nervous, with the ringgit down nearly 20 percent this year against the dollar.

However, Najib's biggest threat comes from within his own party, with Dr Mahathir, Muhyiddin and another veteran UMNO MP, Tan Sri Tengku Razaleigh, upping the pressure.

Muhyiddin said on Monday that several grassroot members of UMNO were worried about the country's leadership but were not willing to speak.

"I ask them to be openly express their feelings. Do not fear the consequences if you are doing the right thing," he said.

For now, Najib still sits strong with a comfortable majority in parliament and little sign that a flood of UMNO MPs will turn on him.

But his growing list of opponents say that even if they can not pull off a no confidence vote, they will look for other ways to unsettle the leader.