Malaysia has rejected a claim by Thailand that Thai restaurants here are funding a southern Thai separatist movement, a report said today.

Deputy Security Minister Fu Ah Kiow described the allegation by Thailand's Prime Minister Surayud Chulanont as "baseless", the New Straits Times reported.

"It is very imaginative of him. It is absolutely baseless. These restaurants are owned by Malaysians and Thais," the newspaper quoted him as saying.

Fu was responding to an article in a Thai daily, The Nation , which cited Surayud as saying that "tom yam kung" restaurants in Malaysia were allegedly financing insurgency activities in the troubled south.

Another deputy security minister, Johari Baharom, demanded Thailand show proof of the allegation.

"If this is true, we will investigate. But they must come to us with information first," he was quoted as saying.

Opposition PAS politician Husam Musa, who is also Kelantan state public administration, finance and economic planning committee chairman also rebuked the allegations.

"I think the stall operators, who are mainly Thai Muslims, would only be sending back money to their families, not for the purpose alleged by Surayud," he said.

Earning a honest living

Thai restaurants owners also criticised Surayud.

"We are working to earn an honest living, not wrecking the lives of others," one was quoted as saying.

Residents in Thailand's southernmost provinces are mostly ethnic Malay and Muslim, sharing more culturally with their neighbors across the border than with the rest of Buddhist Thailand.

Separatist unrest and other violence has marked the region since January 2004, killing more than 1,500 people.

Surayud's military-backed administration has announced plans for talks with two insurgent groups this month, and rebel leaders have reportedly said they would like to hold the talks in Malaysia.