Prime Minister Abdullah Ahmad Badawi today hailed the appointment of former premier Dr Mahathir Mohamad as adviser to national carmaker Proton.

"Mahathir is the adviser to Proton. Mahathir has a long history to be associated with Proton from the beginning," Abdullah told reporters.

State investment arm Khazanah Nasional, the single largest shareholder in the automaker, is reportedly considering plans to allow a foreign carmaker to hold up to 20 percent equity in Proton to boost its competitiveness and improve sales eroded by foreign rivals.

The move follows the withdrawal of its Japanese partner Mitsubishi after two decades.

Mahathir created Proton in 1983 as part of Malaysia's drive into heavy industry.

Abdullah said since Mahathir was behind the setting up of Proton, he could provide valuable knowledge to the company.

"He had a role in its inception and that kind of experience is valuable and he can be tapped for ideas and advice," the premier said.

"(Mahathir) himself has said that he is only to advise and it is not for him to interfere in the executive work of Proton. The board will have the final say," Abdullah said.

Shares in Proton Holdings - a new investment company which has taken over the carmaker's listing status - rose RM0.05 to RM9.20 today. - AFP