Finance Minister Daim Zainuddin's resignation indicates that there is a big crisis in Umno and the government, an opposition party leader told malaysiakini today.

PAS president Fadzil Noor, said Daim's resignation should not have come at a time like this, since the country is facing an economic crisis.

"A finance minister's responsibilities are very heavy especially during this present economic slowdown," elaborated Fadzil when met during the PAS Annual-General Assembly in Kuala Lumpur.

"It is strange that he should resign at a time when the rakyat is questioning the current government and its policies," he added.

This afternoon, Prime Minister Dr Mahathir Mohamad confirmed that Daim has resigned effective June 1, and added that he received the resignation yesterday.

Daim, 63, who has been on a two-month leave since April, is also believed to have relinquished his position as the Umno treasurer as well, with no reason given.

There had been intense speculation that his sudden decision to take a break would lead to his resignation but it was dismissed by Mahathir.

'Incestous' relationship

Keadilan deputy president Dr Chandra Muzaffar questioned Daim's real reason behind the decision since he has resigned in the midst of the country's economic slowdown.

"If it's about the bailout of Malaysia Airlines (MAS) and Time dotCom, he should explain what really happened in order to clear his name or else speculation will continue to tarnish his reputation," he warned.

Recently, the government bought back prominent businessman Tajudin Ramli's 29 percent stake in MAS at twice its market price then.

Daim had argued, "The purchase is not to save Tan Sri Tajudin or Naluri but to save MAS. It is a question of national pride."

The Employees Provident Fund (EPF) was used to lend shares to buy 75 percent of TimedotCom's un-subscribed shares above the initial purchase order resulting in a round of protests by unions and political parties. Chandra said with Daim's resignation, Keadilan hoped to see an end to the 'incestuous' relationship between the government and businessmen.

"Public funds should not be used under any circumstances to save ailing corporations linked directly or indirectly to personalities in power and their families," he said, adding there should be greater transparency in the operations of stock exchange, security commissions and Finance Ministry.

"If following Daim's resignation, Mahathir wants to bring about the much-needed economic reform, the public will conclude rightly or wrongly that the former was eased out by the latter in order to protect Mahathir's own businesses," he added.

New beginning

DAP national chairperson Lim Kit Siang said what concerned Malaysians was whether Daim's departure would be followed by the abandonment of a policy of bailouts and buyouts.

"Will there be a new beginning of a new policy of financial accountability, transparency and good governance?" queried Lim in a press statement today.

"The sad truth is that very few people believe Daim's exit is a portend for the long-awaited reform," said Lim who deemed that the resignation was "no surprise".

He said he believed Daim never applied for time off but was put in a spot by Mahathir to go on such a "bizarre" leave.

DAP secretary-general and Member of Parliament (MP) for Kota Melaka Kerk Kim Hock said that Mahathir and Daim should explain the reason for this 'turn' of events at a time when the government had announced that it is going all out to stimulate the economy.

Highest appreciation

Meanwhile, in a Bernama report, Defence Minister Najib Abdul Razak acknowledged Daim's contributions in overcoming the economic recession in 1986 and the more recent slowdown.

Najib said Daim's measures and his help in setting up the National Economic Action Council (NEAC) had strengthened the Malaysian economy.

Minister in the Prime Minister's Department, Dr Rais Yatim said Daim's decision to resign should be respected and added that, "It is appropriate to record the nation's highest appreciation for his contributions towards national finance."

Following Daim's decision to take leave, Mohd Nazri Aziz, the entrepreneur development minister had been appointed acting finance minister.