Malaysia says trade ban stays

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HOPES of an early end to the Malaysian government's ban on trade with the United Kingdom were dealt a blow last night by its prime minister, Mahathir Mohamad, writes Rhys Williams.

In a letter in today's Financial Times he said there would be 'no contracts in exchange for British press freedom to tell lies' and as far as his country was concerned, the 'die is cast'. Malaysia decided three weeks ago to freeze new contracts with British companies because of anger at press reports of alleged bribes to Malaysian politicians, and suggestions of a link between a pounds 1bn defence contract won in 1988 and pounds 234m of British aid for the Pergau dam.

He attacked the Sunday Times for alleging Malaysian politicians had been offered bribes by the construction company Wimpey. He said he 'need not subscribe to that as even Andrew Neil did not accept reports on his affair with Pamella Bordes'.

Mr Neil, editor of the Sunday Times, last night said Dr Mahathir was 'a very confused prime minister'.

The Sleazy State, pages 8 and 9