The government will not interfere in the management decisions of Malaysia Airlines (MAS), deputy prime minister Najib Razak has said, after reports emerged that the flag carrier may sell its headquarters building.

"We do not micro-manage Malaysia Airlines," Najib was quoted as saying by the New Sunday Times .

"Malaysia Airlines has its own board of directors and management and they can decide" whether to sell the headquarters in Kuala Lumpur, he added.

Reports said on Saturday that the loss-making national airline would move out of the landmark 35-storey building, heightening speculation that it would be sold.

A memo issued by new managing director Idris Jala said the shift was aimed at "managing costs" and "streamlining operations," NST reported.

The report said Idris wants the airline to concentrate its operations in two main areas - Subang, just west of Kuala Lumpur, and at Kuala Lumpur International Airport, south of the capital.

Idris was expected to brief senior management on Wednesday on his business turnaround plan, which would be submitted to the government by the end of January.

"Idris is expected to provide figures as to how much divisions will save if they execute his cost-cutting measures," the NST newspaper said, citing unidentified sources.

The bulk of the airline's several hundred staff working in the headquarters in Kuala Lumpur's prime business area would move to Subang, but ticketing operations and related services would remain in Kuala Lumpur, it said.

No more bailouts

Malaysia Airlines staff would be moved in two phases, the first from this month to March and the next in June.

Last month, the carrier came under fire from the upper house of parliament after it proposed to sell the building to raise funds and trim losses.

The national carrier ended 2005 in a troubled state after posting two consecutive quarters of losses, and faced calls for costs to be slashed and better contingency plans to be made for rising fuel prices.

Prime Minister Abdullah Ahmad Badawi said last month that the government was willing to extend loans to Malaysia Airlines to help it return to profitability, but ruled out a bail-out.

The government owns at least 69.3 percent of the airline through the state investment arm Khazanah Nasional. The government has bailed out the ailing airline in the past.

In 2001, following allegations of mismanagement, the government controversially bought then-chairman Tajudin Ramli's stake in the carrier for more than twice the market value, a move followed by a restructuring exercise.