(AFP) Prime Minister Mahathir Mohamad will celebrate New Year's Eve with thousands of Malaysians in Merdeka Square here with a flag raising and fireworks display.

Some 350,000 revellers are expected to throng parts of Kuala Lumpur to join in the New Year countdown and police will deploy some 1,000 personnel to ensure security.

Dell Akbar Khan, Kuala Lumpur's deputy police chief told AFP today police were confident there would not be any breach of security.

"It is merry-making time. But please do it within the confines of the law," he said.

The country's economic slowdown has failed to dampen the festive mood.

Tens of thousands were expected to gather later in the day in Merdeka Square for a colourful celebration that will include cultural performances and free food.

Huge tents and stages have been put up along with colourful lights to turn the area into a mini-Disneyland.

Traditional costumes

Organisers said people were also being encouraged to bring their own food to share with others and to wear traditional costumes with the aim of promoting national unity among Malaysia's 23 million people.

Mahathir recently said Malaysia would post modest economic growth of 0.5 to 1.0 percent in 2001, down from earlier projections of 1.0 to 2.0 percent, and pinned his hopes on domestic consumption to spur the economy.

The government last month cut its growth forecast for this year for a second time to 1.0-2.0 percent, and has imposed a range of fiscal measures to boost consumer spending.

Malaysia last plunged into recession in 1998 amid the Asian financial crisis, but it rebounded the following year and recorded a heady 8.5 percent growth in 2000.