KUALA LUMPUR, MALAYSIA - MALAYSIA'S exiled former communist chief, who fought a bloody 12-year guerrilla campaign, has lost his latest bid to return to the country, his lawyer said on Sunday.

Mr Chin Peng, the former secretary-general of the outlawed Communist Party of Malaya (CPM), took legal action after the government rejected his 2003 request to return.

But the bid, according to his counsel Darshan Singh Khaira, has now been rejected by the Court of Appeal who upheld a earlier ruling that Mr Chin Peng show identification papers to prove his citizenship.

'Chin Peng is obviously disappointed by the ruling but he says he will continue his fight to return home until all legal avenues are exhausted,' Mr Singh told AFP.

'We are unable to make sense of the ruling because Chin Peng had already said his identification papers were seized by the authority of the day in the 1940s and so he is unable to produce them,' he added.

Mr Singh said the former communist leader should be allowed to return under a December 1989 peace agreement between the government and CPM members.

'The agreement signed by Malaysia, Thailand and the CPM says those of Malayan origin are allowed to return and Chin Peng was born in Malaya,' he said, using the country's pre-independence name.

'The government must honour its obligations to Chin Peng,' he added.

Mr Singh said he was preparing Chin Peng's appeal to the Federal Court, the country's highest judicial body.

Born Ong Boon Hua in Sitiawan in Malaysia's northern Perak state in 1923, Mr Chin Peng won the Order of the British Empire (OBE) and two medals for helping the British fight the Japanese in Malaya during World War II.

He later led the communist party, backed by China, in a guerrilla campaign against the British colonial and Malay governments between 1948 and 1960, in which hundreds were killed. Mr Chin Peng left Malaysia in 1961 and has been in exile since.

Malaysia in 2003 denied his request to return on grounds he was still linked to a banned organisation with a 'history of perpetrating terrorism' in the country.

Mr Chin Peng currently lives in exile in Thailand, his lawyer said. -- AFP