By Elizabeth Looi, Malaysia Correspondent

KUALA LUMPUR, MALAYSIA - Prime Minister Najib Razak said a new category of scholarships would be introduced next year which would be based solely on results obtained by students, and not on their racial background.

The merit-based scholarships will go some way to assuage complaints from non-Malays that some of the brightest Malaysian students are not backed by the government, causing a brain drain.

PM Najib announced the new scheme at a dinner organised by the Malaysian Chinese Association (MCA) and the Associated Chinese Chamber of Industry and Commerce late on Saturday.

'The best of the best and the creme de la creme will get aid for higher studies.

'I believe this will be accepted well and it will allow each individual a fair chance to realise his full potential,' he was quoted as saying by The Sunday Star newspaper.

But he declined to give further details, apart from saying that the government was studying 'the distribution of scholarships' through its Public Service Department.

The main BN component parties, the MCA and the Malaysian Indian Congress, hailed the Premier's move.

'I have been working on this issue since 2001 and I'm glad to see Najib has made such a positive move after he took over as the Prime Minister,' MCA education bureau head Wee Ka Siong told The Straits Times.

The ruling BN coalition lost much support from Chinese and Indians at the general election last year, and has since been trying to woo them back.

The scholarship plan also signals a further toning down of the bumiputera policy following Datuk Seri Najib's recent liberalisation of some sectors of the economy to bring competition to the Malays.

To reduce potential backlash from Malays, PM Najib said in his speech that the Chinese were not against Malays succeeding, and neither were they opposed to efforts to help the bumiputeras. But they wanted to see policies which looked at the needs of all Malaysians fairly.

'Like all Malaysians, they also want to see their children have a good education and become successful. All this involves costs,' he said.

But not all Malay leaders are expected to accept this decision, analysts say.

Political analyst Agus Yusoff of the National University of Malaysia said: 'This issue will definitely be politicised. The ultra Malays will make as if their advantage has been taken away but we have to move on,' he said.

Former Umno Youth education bureau chief Ahmad Ikmal Ismail lauded the plan and hoped the scheme would be implemented in a transparent manner.

But Professfor Agus believed that it would not be easy for the BN to win back the Chinese and Indian votes.

'Scholarship is only a micro issue. The public looks at macro issues such as democracy, police brutality, double standard practices and the judiciary system,' he said.

But others feel the BN would get brownie points from non-Malays for the plan.

'This will definitely help BN in the next general election, and based on my studies, more people have given a positive response towards BN's new policies,' noted political analyst Ahmad Atory Hussain of Universiti Sains Malaysia.

This article was first published in The Straits Times.