Malaysian reports hit 'raw nerve': British businessmen in Malaysia want reprisals over the expanding trade ban. Chris Blackhurst reports on the mood in Kuala Lumpur

AT THE exclusive clubs frequented by British businessmen in Kuala Lumpur feelings were running high yesterday. The anger was not directed against the British press for articles that the Malaysian government claimed had provoked it into a banning trade, however. Many businessmen demanded retaliation, adding that the articles had 'touched a raw nerve' because they were true.

In the Royal Selangor golf club and Commonwealth Club, on the outskirts of Kuala Lumpur in the expatriate area of Damansara Heights, some attacked John Major for not doing enough to save jobs and future prospects.

An executive from a British contract catering company said: 'We want to know what retaliation the British government will take.' Something needed to be done to resolve the situation before it got out of hand. His company had spent two years setting up in Malaysia and linking with a local partner to bid for government catering contracts. That work was in ruins.

The expatriates said police authorities and other agencies should stop buying the Malaysian Proton car.

Kevin Kelly, who works for a Malaysian company, said Britain should be proud of its free press.

A British businessman said that a peace mission should be attempted, by Mr Major or Douglas Hurd the Foreign Secretary - or preferably by Baroness Thatcher. 'That will be the last thing Mr Major wants but if that is what it takes it should be done.'

A fellow member of the Royal Selangor, a management consultant, also advocated calling on the services of Lady Thatcher, who struck up a warm relationship with Mahathir Mohamad, the Malaysian Prime Minister, when she was in power. That friendliness has evaporated under Mr Major, whom Dr Mahathir regarded as weak. 'Dr Mahathir is a strong man - he doesn't like substitutes.'

'The stories are true - that's why the Malaysians don't like them,' said a software consultant at the Commonwealth Club. He quoted a banking contract worth dollars 68m ( pounds 45m) where a local middleman demanded dollars 15m.

They all said it was too early to decide about their futures. However, unless the ban was revoked quickly it would cause great harm.

Nobody disputed Dr Mahathir has wrought an economic miracle in Malaysia. They were all adamant though that he had overreached himself. 'The Malaysian government loves to claim this is a colonial issue. It's rubbish. They've done this because they can't bear a free press,' said a businessman at the Commonwealth Club.

Their anger was heightened yesterday by the announcement that the embargo is being extended from contracts with the public sector to privatised companies and agencies. Anwar Ibrahim, the Deputy Prime Minister, said that 60 former state-owned companies, including Malaysia Airlines, Tenaga Nasional, the country's power supplier, and Telekom Malaysia, are forbidden from entering into new contracts with Britain.

Senior Tories yesterday also urged Mr Major to take tougher action over the trade ban. The Government was urged to use the threat of trade sanctions against Malaysia in the European Union to force a rethink of the policy. 'Malaysian imports are far larger than our exports to Malaysia,' said David Howell, chairman of the select committee on foreign affairs.