The government has extended a conditional amnesty for illegal immigrants indefinitely today after Indonesia asked for a delay in a planned crackdown as it struggles with the aftermath of the tsunami disaster.

A three-month amnesty for hundreds of thousands of illegal workers expired at midnight on Monday, but a threatened nationwide sweep to arrest them was put on hold at the last minute.

Home Minister Azmi Khalid said the decision to extend the amnesty was taken at a cabinet meeting today, based on a written request from Indonesian President Susilo Bambang Yudhoyono.

"It may appear to most Malaysians that we have backtracked but we must put ourselves in Indonesia's shoes," he told a news conference.

"Imagine if our country was stuck by a huge disaster and within a month our fellow citizens were treated badly in another country, how would we feel?"

Indonesians make up most of the illegal immigrants in Malaysia, many of them from Aceh province, the area worst hit by the Dec 26 tsunami which has left about 280,000 people missing or dead around the Indian Ocean.

The United Nations High Commissioner for Refugees had also asked for an extension of the amnesty amid concerns that a large-scale return could worsen the humanitarian crisis.

Nearly 400,000 illegal immigrants took the opportunity to go home during the three-month amnesty without facing any penalty, leaving at least the same number behind according to official estimates.

Apart from Indonesia, illegal immigrants come from the Philippines, Burma, Bangladesh, India and Sri Lanka to take jobs in the construction, plantation and service industries in relatively prosperous Malaysia.

The Philippine government had also asked Malaysia to extend the amnesty by a month to accommodate the estimated 170,000 Filipinos who failed to take the chance to leave the country legally, according to reports in Manila.

Crackdown to go ahead

Azmi said an operation to track down illegal immigrants would go ahead, but the approach would be different. They would be finger printed and given a week to leave the country with the opportunity to return legally.

Malaysian immigration officials would be stationed in certain areas in Indonesia to facilitate their return, Azmi said.

"We are working together to make this less burdensome to them (Indonesia). If people return to Indonesia and they do not work, they will become a burden to their country."

By gaining legal status in Malaysia they would be able to remit money home and this would help address the country's economic problems, he said.

If they did not leave Malaysia within the one-week grace period they would be deported and barred from ever re-entering the country, Azmi said.

Once the amnesty expired unregistered foreigners would face imprisonment or whipping, he added. Asked when this would be, he replied: "I cannot say when but it cannot be too long."

The extension of the amnesty would be welcomed by rights groups which had expressed concerns over the planned crackdown, but Azmi acknowledged that it would "not (be) popular among the Malaysian public because they would like us to take a more drastic approach".

Illegal immigrants are often blamed in Malaysia for crime, taking jobs from locals and the creation of squatter settlements.

Malaysia has long sought to cut its reliance on foreign workers, most of whom are engaged in low-paying unskilled jobs.

A previous crackdown in 2002 saw nearly half a million people repatriated during a four-month amnesty period.

However, this caused a severe labour shortage in the construction and plantation sectors, and the government later had to fast-track approvals for recruiting foreign workers for certain industries, while thousands simply made their way back illegally.