Malaysia marks birthday amid brewing political storm

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The prospect of a power struggle has alarmed foreign investors and unnerved the financial markets. The Malaysian currency, the ringgit, is near an 11-month low, and the stock market hit a 20-month low last week.

Government leaders have played down the prospects of their MPs crossing over to Pakatan. But that has not stopped them from scare-mongering about Anwar.

Deputy Prime Minister Najib Razak said the country could lose its independence if the Barisan government loses power.

"If we do not safeguard the nation's independence, we will only be left yearning for it if we lose power," he said on Saturday in his home state of Pahang.

Anwar is banking on Barisan MPs from the eastern states of Sabah and Sarawak on Borneo. The two resource-rich states have complained that their grouses have often been overlooked by the federal government.

In a major setback to Prime Minister Abdullah Ahmad Badawi, several of his MPs from the two states have refused to sign a petition launched last week pledging support for him.

Abdullah moved to appease the Sabah and Sarawak state governments by proposing major infrastructure projects in his 2009 Budget speech in parliament on Friday.

In his National Day speech, Abdullah asked Malaysians to rally behind his government to face "all enemies and challenges".