A group of 131 Thai Muslims who fled across the border to seek refuge in Malaysia this year will soon return to troubled southern Thailand, according to a news report today.

Relations between Bangkok and Kuala Lumpur have deteriorated since the group from the Thai province of Narathiwat crossed into Malaysia in August, claiming they were fleeing separatist unrest.

Preparations were now being made for them to travel back to Narathiwat, the New Straits Times said, quoting unnamed sources.

The breakthrough was reached when Prime Minister Abdullah Ahmad Badawi met his Thai counterpart Thaksin Shinawatra on the sidelines of last month's Asia Pacific Economic Cooperation summit in South Korea, said the daily.

There had been further positive developments on the issue during a Bangkok visit by former Malaysian prime minister Mahathir Mohamad, it said.

Good progress

Meanwhile in Bangkok, Deputy Prime Minister Surakiart Sathirathai would neither confirm nor deny the report, but cited "good progress" in talks with Malaysia.

"I can't confirm the report. Currently the foreign ministry and security agencies are coordinating with Malaysia ... but there is no official confirmation," he told reporters.

The Straits Times report said that "the decision was made in the best interests of all parties, although it was learnt that they (the Thai Muslims) were quite reluctant to return home."

The newspaper quoted the sources as saying that Malaysia had only agreed to the decision following an assurance from the Thai government on the group's safety.

"Our authorities are now waiting for clearance from their Thai counterparts, before fixing an exact date for their repatriation," the report quoted a source as saying.

A secret

Surakiart said talks between Thaksin and his Malaysian counterpart Abdullah on the sidelines of the Apec summit had marked a positive milestone in relations that have soured since August.

"There is good progress in talks at every level, including between officials, and with recent good understanding between leaders. I don't want to go into details," he said.

"I'm afraid that I may say more than what has actually happened, and it will cause trouble again. Malaysia is following its own procedures and they have asked to treat the issue as a secret," he said.

Malaysia had in the past been reluctant to allow refugees into the country, fearing this could draw people from other regional troublespots to the country.

However, as a mainly Muslim country and current chair of the Organisation of the Islamic Conference, Malaysia has also said it has a duty to protect Thai Muslims.

Security analysts have warned that the situation in southern Thailand, where about 1,000 people have died in the unrest since January 2004, could spread and destabilise Southeast Asia if not managed properly.