SINGAPORE Singapore and Malaysia are to resume talks aimed at fixing a price for the city-state's water supply from its neighbour, one of the thorniest issues between the two countries, a report said today.

The talks will also look into Singapore's request for future supplies after one of two water agreements expires in 2061, Foreign Affairs Minister S. Jayakumar said in remarks published in the Sunday Times .

"One is the revision of the current water price, which they have said is important," the minister said.

"The other is Singapore's request for future water after 2061. We have said that if we are to have another round of talks, it must include the second point and Malaysia must not say that this is something to be settled in 2059."

The two sides failed to reach an agreement for a new water-pricing formula when they last met, in Malaysia's southern Johor state bordering Singapore in October.

Jayakumar said the talks would likely take place early next year.

Malaysia, which supplies resource-starved Singapore with half its daily water needs, wants a price increase. It now sells raw water to Singapore at three Malaysian sen (less than one cent) for 1,000 gallons (4,550 litres).

Recycling waste water

Singapore recently began recycling waste water on a limited scale to cut its dependence on Malaysian imports, and has said it will be in a position to let one of the two countries' water agreements lapse in 2011.

The second agreement expires in 2061.

Water has been a key irritant in bilateral relations since Singapore was kicked out of the Malaysian Federation and gained independence in 1965.

Other disputes include a proposed new bridge linking the two countries, use of Malaysian airspace by Singaporean aircraft and the location of Malaysia's customs, immigration and quarantine facilities in Singapore. AFP