KUALA LUMPUR - MALAYSIA has revoked the publishing permit of a Tamil-language daily for breach of its licence, a minister said on Thursday, drawing a sharp rebuke from a rights groups over curbs on press freedom.

Makkal Osai's general manager said on Wednesday it received a letter from the home ministry refusing to renew its annual permit, without giving reasons.

Home Minister Syed Hamid Albar said the permit of Makkal Osai, which sold about 55,000 copies a day, was revoked because the daily contravened some of the ministry's guidelines.

'In the case of Makkal Osai, we do not cancel the permit but decided not to extend it,' he added.

Mr Syed Hamid said the guidelines stipulated that newspapers should not raise sensitive issues that could threaten racial harmony and the country's stability, Bernama reported.

He did not elaborate but one senior journalist said the outspoken newspaper had lately played up stories on opposition leader Anwar Ibrahim.

'I think that got them into trouble,' said Mr Baradan Kuppusamy, an expert on Indian issues. 'Their Anwar coverage was fantastic.'

On Monday, Mr Anwar addressed about 10,000 people to mark the end of his five-year ban from seeking public office.

Police halted Mr Anwar's speech at the rally and questioned his wife and three others for holding an 'illegal assembly'.

Mr Anwar, who was in the political wilderness after being dumped in 1998 by his former mentor, ex-prime minister Mahathir Mohamad, has seen his political fortunes revived after the opposition made surprisingly big gains in general elections last month.

The Centre for Independent Journalism said the ban on Makkal Osai could be the start of a witch-hunt by Prime Minister Abdullah Ahmad Badawi's government.

'The administration is resorting to its usual hardline methods at the expense of the people's right to freedom of expression and information,' the Malaysian-based group said.

Malaysian rights group Suaram also condemned what it said was the government's disregard for press freedom.

Still, Mr Syed Hamid told Bernama the paper could appeal the decision.

Ethnic Indians, a minority in the Malay Muslim-dominated country, disagreed with the decision.

In the capital's Indian-dominated Brickfields neighbourhood, many were critical of the government's sudden action.

'The government is trying to silence the Indian community by banning the paper. We have expressed our anger in the elections and now they want to get revenge by shutting our news, this is wrong,' restaurant owner Pradeep Kumar said.