Leaders of Malaysia's ruling party are due to meet on Tuesday to discuss Prime Minister Mahathir Mohamad's future in office.

Dr Mahathir said he was stepping down from the ruling Umno party's leadership on Saturday, before apparently being persuaded to withdraw the resignation an hour later.

You can rest assured the prime minister will come back as prime minister

Rafidah Aziz, minister of international trade

Dr Mahathir is now on holiday in Italy and has not spoken publicly since, leading to speculation in Malaysia that his notice to quit was either a political tactic or the first step in a transition of power to his deputy, Abdullah Ahmad Badawi.

The uncertainty triggered falls on the Kuala Lumpur stock market on Monday.

Newspapers carried calls for Dr Mahathir, 76, to stay on, though some commentators hinted that the episode may have been stage-managed to shore up his support.

Confusion

The sense of confusion was compounded by the death on Sunday of the head of Malaysia's fundamentalist Islamic opposition party, Fadzil Noor.

The 65-year-old died without regaining consciousness after a heart-bypass operation nearly two weeks ago, his Parti Islam SeMalaysia (PAS) said.

Fadzil was seen as a moderate in his party

The party - which holds 27 of Malaysia's 193 federal parliament seats and controls two out of 13 states - had already appointed its Deputy President Abdul Hadi Awang to stand in during Fadzil's illness.

Dr Mahathir, Asia's longest-serving elected leader, wept as he announced his resignation during his closing address to the annual assembly of his United Malays National Organisation (Umno).

Umno has seen a recovery in popularity as support fell away from the Islamic PAS in the wake of the 11 September attacks on the US by Muslim extremists.

PAS had made strong gains in the 1999 elections when Fadzil - party leader since 1989 - put together a coalition of opposition parties to challenge Dr Mahathir.