Malaysia will not go to war with Singapore over "territorial gains," Prime Minister Mahathir Mohamad said today as a series of disputes rattled tensions between the neighbours.

The veteran Malaysian leader did however criticize the recent Singaporean decision to publicise letters he wrote to the republic's former premier Lee Kuan Yew over the price of water Malaysia supplied to the resource-starved island.

"The facts are not correct and I think it is not nice to publicise letters which were written in confidence. It shows a lack of faith," he told reporters after opening a factory here.

"It is very difficult now for us to write letters at all because we might as well negotiate through the press."

Asked if the two would resume talks to ease tensions, Mahathir said Malaysia was prepared to do so but noted the focus had since shifted from water prices to Singapore's sovereignty in the dispute over an islet off the southern Malaysian state of Johore claimed by both.

The neighbours have agreed to refer the case to the International Court of Justice.