About 100 armed men holed up in a village in Sabah are refusing to leave, saying they have links with the Sultanate of Sulu in the Philippines which has a historic claim over the northern tip of Borneo island.

Malaysian police and army officials have formed a tight security ring around the village, media said, with navy boats patrolling nearby islands. The gunmen landed near the coastal town of Lahad Datu on Tuesday.

The drama on Borneo island has threatened to spark diplomatic tension between the South-East Asian neighbours whose ties have been periodically frayed by security and migration problems caused by a porous sea border.

"They demand to be acknowledged as citizens of the Sultanate of Sulu," Abdullah Kiram, a son of the Sultan of Sulu, Ismael Kiram II, told Reuters in Manila.

Sulu is an archipelago in the southern Philippines. Today, it is a province but the old sultanate covered a wider area that included the northern tip of Borneo, which is now the state of Sabah.

In an arrangement that stretches back to British colonial times, Malaysia pays a token amount to the sultanate each year for the "rental" of Sabah.

"They want to be acknowledged as citizens of their own land. They own Sabah," said Kiram. Sultans in the Muslim-majority Philippine south have no power but generally enjoy the respect of the people.

Malaysian officials said they suspected the men were a faction of a Philippine Muslim rebel group. Philippine officials said they were unarmed Filipinos who had been promised land.

A spokesperson for the Philippine Foreign Ministry said today that Malaysia had given an assurance that efforts were under way to get the men to leave peacefully.

"We therefore urge these concerned individuals to return to their homes and families," said spokesperson Raul Hernandez.

Situation not tense, says police chief

Malaysia's police chief said yesterday the situation was not tense and the men appeared to be "behaving well".

"Discussion is proceeding well and we have told them to leave Sabah peacefully, as we do not want any situation which can threaten the security of the people," inspector-general of olice Ismail Omar told a news conference, according to state news agency Bernama .

The Philippine embassy in Kuala Lumpur has sent a team to Sabah to coordinate with authorities there and to ascertain the identities of the men.

Sabah has a history of militants attacks in more remote parts of the state. The United States had issued travel warnings in the past to Sabah's east coast which has diving sites.

In 2000, a group of militants from the southern Philippines kidnapped 21 tourists from diving resort on Sipadan island. In 1985, 11 people were killed when gunmen believed to be from the southern Philippines entered Lahad Datu, shooting at random before robbing a bank.

- Reuters