Malaysia's Anwar bailed as govt fights race row

By Jalil Hamid

KUALA LUMPUR (Reuters) - Malaysia's opposition leader Anwar Ibrahim was bailed on sodomy charges on Wednesday, allowing him to push ahead with his bid for power at a time when the government is embroiled in a bitter race row.

This is the second time Anwar has faced what he calls politically motivated sodomy charges, after being jailed and barred from office for corruption and sodomy in the late 1990s.

He says the new charges are designed to discredit him as he seeks to entice 30 government legislators to join his opposition alliance in the coming days and take power from the coalition that has ruled Malaysia for more than 50 years.

"I am not guilty, this is a lie, this is malicious," Anwar told reporters as he entered the court flanked by his wife and daughters and fellow opposition MPs.

"This is trial by ambush," he said after the court appearance in which he was bailed until Sept. 24, when the judge will decide on a prosecution request to transfer the case to a Kuala Lumpur high court, a move he opposes.

Anwar's bid for power comes after Malaysia's Barisan Nasional coalition was rocked in March elections when it lost its two-thirds parliamentary majority for the first time.

It has since struggled to strike a chord with voters at a time of rising prices and slowing economic growth in this Asian country of 27 million people.

As political tensions have risen, investors have been unnerved. The cost of insuring Malaysia's debt has risen sharply to around $136,500 per $10 million of debt from $90,185 prior to the March election, based on prices for 5-year credit default swaps, a barometer of risk.