A government-appointed panel probing a video clip allegedly showing judicial corruption favours holding a royal commission into the incident, a report said today.

The New Straits Times said the panel had concluded the clip - featuring senior lawyer VK Lingam purportedly brokering judicial appointments with a top judge - was authentic and should be investigated further by a royal commission.

Parliamentary Opposition Leader Lim Kit Siang said that if the three-member panel confirmed the report when it handed down its findings next week, Prime Minister Abdullah Ahmad Badawi would have to act decisively.

"If this is true, then (he) would have no option but to establish a Royal Commission of Inquiry or he would be facing his greatest crisis of confidence in his four years as prime minister," he said in a statement.

Lim said a royal commission must be given full powers to investigate suspicions of corruption in Malaysia's judiciary, which he said was in crisis after a dramatic decline in standards over the past two decades.

Full-fledged inquiry needed

The country's Bar Council has also demanded the fully-fledged inquiry into the tape, which was released by PKR's de facto leader Anwar Ibrahim.

Anwar unleashed a furore in September when he released an eight-minute video clip of the alleged phone conversation in which Lingam purportedly tells the former CJ Ahmad Fairuz Sheikh Abdul Halim he would put his name forward for a senior appointment.

Anwar was heir apparent to former premier Dr Mahathir Mohamad until he was sacked in 1998 after being hit with sodomy and corruption charges that landed him in jail for six years.

The sodomy conviction was overturned but the corruption verdict stands, barring him from standing for public office until April 2008.

SPECIAL REPORT: The Lingam tape