Singapore respects Malaysia's sudden move to scrap a contentious new bridge to the city-state and hopes bilateral ties will remain good, Foreign Minister George Yeo said.

Malaysia yesterday said it had abandoned plans to build the controversial "half bridge" to Singapore, saying the city-state's demand for airspace access and sand for land reclamation in return for its agreement was unacceptable.

"We respect the decision of the Malaysian government," Yeo said in remarks published in the Today newspaper.

"I am sure our bilateral relations will continue to be very good. There are so many areas we are cooperating in, and I have a very good working relationship with (Malaysian Foreign Minister) Syed Hamid Albar," he said.

"I hope between the two of us, we can continue to promote good relations between our countries."

The decision was an abrupt about-face for the Malaysia government which had repeatedly insisted it would go ahead with its half of the project to replace an ageing colonial-era causeway - even though Singapore had not agreed to build on its side.

Singapore, which was evicted from the Malaysian federation in 1965, has maintained that replacing the causeway would be costly and of little benefit, but agreed to negotiate on a full bridge if there was a "balance of benefits".

No mutual consent

Singapore also insisted that Malaysia could not unilaterally build its own half of the bridge as international law requires mutual consent by affected parties.

In his published remarks, Yeo said Syed Hamid did not give details of why Malaysia made the decision but that it concerned domestic political considerations.

Malaysia's decision "has got nothing to do with victory or defeat" between the neighbours, Yeo said.

"We negotiated on the full bridge on the basis of mutual benefit for both sides. And I am quite sure we will be able to find other areas where we can cooperate to our mutual benefit," he said.

Singapore and Malaysia have squabbled for years over a variety of issues. But while many other bilateral feuds have been settled amid a recent thaw in relations, the bridge has remained a thorny topic.

Other outstanding issues include the price of water that Malaysia supplies to resource-scarce Singapore, the future of Malaysian-owned railway land inside Singapore and rival claims to a rocky islet.