The Malaysian Prime Minister, Mahathir Mohamad, has warned that his country might be the next target following the bombings in Bali and the Philippines.

Dr Mahathir, who was speaking in India before going on to Pakistan, said fears of terrorism would hurt foreign investment in the region.

We have been assured that the security in the country is very much under control

Wahiruddin Wahid, Shell Malaysia

Reports from Malaysia say police have increased security around nightspots frequented by westerners, and stepped up checks at entry points to the country.

The Malaysian Government earlier protested to the United Nations over a report which quotes from a book linking it to al-Qaeda.

Dr Mahathir told a news conference in Delhi that countries of the Asean (Association of South East Asian Nations) region had to work together to stop terrorism.

"The level of co-operation between the countries may differ, the perception of terrorism may also differ, but generally there is consensus on the need for us to handle terrorism together," he said.

"Terrorists respect no borders. They will operate in any country. Even the countries least involved might find themselves the targets of terrorist attacks. As you know, Bali was the most peaceful part of Indonesia and yet they chose Bali to launch the attacks."

Risks assessed

Malaysia is south-east Asia's second-biggest oil and gas producer after Indonesia.

Malaysian officials would not comment on security operations, but a spokesman for Shell Malaysia told Reuters news agency it had contacted authorities about any risks.

Wahiruddin Wahid, Shell Malaysia's corporate affairs general manager, said: "We have been assured that the security in the country is very much under control, and have been asked not to be unduly alarmed as there is no supporting evidence to indicate risk of any imminent attack on specific targets in the country."

Malaysia says it has supported the United States in its campaign against al-Qaeda, arresting more than 70 suspected Islamic militants over the last year.

Anger at report

It therefore reacted angrily to a report, commissioned by the United Nations Security Council, which links the Malaysian Government to al-Qaeda.

The report quotes from a book, Inside al-Qaeda, by the Sri Lankan author Rohan Gunaratna who links a number of Malaysian organisations, including the governing Barisan Nasional coalition, to Osama Bin Laden's network.

He says the two have political and ideological connections through the Moro Islamic Liberation Front which is campaigning for an Islamic state in the southern Philippines.

Malaysia's opposition Islamist party Pas, and three other Islamic groups, are also named in the report.

But Deputy Prime Minister Abdullah Badawi called the references to his government "wild and irresponsible" and asked for them to be removed.

He said the government is considering legal action against Mr Gunaratna.