Prime Minister Abdullah Ahmad Badawi said Malaysian carmaker Proton was seeking clarification from Volkswagen after the company's head announced the scrapping of a possible joint venture.

Abdullah said Proton had asked for formal notification of the statement by Volkswagen chief executive Bernd Pischetsrieder.

"Yes, Proton is still talking to Volkswagen. The statement (to scrap the joint venture plan) was made by a chief executive officer," he told reporters.

"Proton just wrote to them and asked them to formally indicate to them what exactly is the present situation."

Last Friday, Pischetsrieder told auto analysts in Michigan that the alliance, which has been under negotiation for the past year, had collapsed and that any future cooperation would be limited in scale.

Specific idea

"When it comes to Proton in Malaysia, we had a very specific idea of how we wanted to proceed there. Unfortunately the Malaysian government, Khazanah and Proton had different ideas," Pischetsrieder said in the presentation which was posted on the company's website.

"Therefore what we wanted in the cooperation with Proton will not materialise," he said.

Khazanah is the Malaysian government's investment arm which holds about 38 percent of the troubled carmaker.

From a market share of 60 percent in 2002, Proton saw a decline to 48 percent in 2003 and then 44 percent in 2004.

The alliance with Volkswagen was seen as an opportunity to turn the business around by reversing its reputation for poor quality and a lack of innovation.