Dr Mahathir Mohamad has dismissed the allegation that he paid DAP veteran Lim Kit Siang RM1 billion, claiming only the insane would believe he had such a fortune at his disposal.

"Apparently, I paid Lim RM1 billion in order to become Pakatan Harapan chairperson.

"Only a kurang siuman (mad) person would think that I have RM1 billion," he said in a video clip posted on Parti Pribumi Bersatu Malaysia's (Bersatu) Facebook page today.

Mahathir, who was prime minister for more than two decades, said he lives in a house that is smaller than those belonging to "normal" cabinet ministers, because he lived within his means.

The allegation first surfaced on the Malaysia Today website, which is operated by Raja Petra Kamaruddin.

Mahathir said he believes that Raja Petra is not sane, and that if he was, he should show proof of his allegation.

Harapan decided to make Mahathir its "top dog" in July and he has been regularly chairing the coalition's weekly leadership meetings.

Yesterday, Lim said he would sue local media organisations which repeated claims that he was involved in the RM1 billion payment.

Among others, the allegation was also published in the Umno-owned daily Utusan Malaysia.

Mahathir's critics have always accused him of enriching his cronies and helping his children amass billions during his tenure as prime minister. He has denied this allegation, claiming that his sons were self-made successful corporate figures.

Some of his fiercest critics, who raised this issue in the past, are now allies of Mahathir in Harapan.