By Jonathan Kent in the north western Malaysian state of Terengganu

Malaysia has seen a sharp fall in the number of tourists visiting its resorts.

Tourist arrivals have fallen by almost a third to between 100,000 and 300,000 visitors a month.

The whole of South East Asia has seen a similar pattern since the terrorist attacks on Bali in neighbouring Indonesia two months ago.

And now Malaysia's tourism industry - the country's second largest foreign exchange earner - is facing new challenges as the government asks sunbathers on its golden beaches to cover themselves up.

Unimpressed

It may be the off-season in Terengganu, but the beaches are even more deserted than normal.

Two months ago the hardline Islamic state government announced that sunbathers would be asked to dress modestly.

Sunbathers were not impressed.

"For a man to come up to me on a beach and tell me to cover up I would be very embarrassed," one visitor said.

Another agreed. "I wouldn't feel very good to be told that you should cover up on a beach. It would be a different matter if you were outside a mosque or a religious place."

Sensitivity

By the time I caught up with the state's chief minister, Abdul Hadi Awang, who also leads Malaysia's Islamist party PAS, he had toned down his message.

"In isolated places, as in the beach where women and husbands want to enjoy themselves, it is OK to us," he said.

"But in public areas I think that tourists should understand that they must take care also about the sensitivity of the people."

The owner of a local resort said he wished the local politicians would think before they speak.

"It is not very helpful when they make certain statements knowing that the regional and the world tourism industry is in such a sensitive situation.

Anything that is misconstrued will actually add to the already grim picture of the worldwide tourism scenario," he said.

"Terengganu does not need more statements like that."

Key industry

The order for tourists to cover up came just two days before the Bali bombings.

A spokesman for the state's tourism industry confirmed the attacks have had a profound effect.

According to the country's tourism minister, Abdul Kadir, visitor numbers have dipped by as much as 30% in the past two months and that is serious, he said, because tourism is one of Malaysia's key industries.