Prime Minister Abdullah Ahmad Badawi criticised the country's majority Malays and indigenous groups, saying they must stop relying on handouts, adding that government contracts awarded to them were being abused.

"They do not want to work, do not want to learn, and give little importance to the opportunities provided by the government," he said.

Malaysia practices a form of positive discrimination that favours economically disadvantaged bumiputeras - ethnic Malays and indigenous groups - in government contracts, business deals and access to education.

But Abdullah said late yesterday a government study showed that 85 percent of projects won by bumiputera contractors were passed instead to other races in Malaysia, the state Bernama news agency reported.

Over-reliance on subsidies

He also warned that over-reliance on subsidies would undermine Malaysia's competitiveness and economic development.

"This approach will only make us hope and wait for aid and subsidies. Such a mentality thrives among the people, including bumiputera petty traders and contractors," he was quoted as saying.

The government for decades has upheld its bumiputra policies despite calls for an overhaul of the system in which the big winners have been an elite group of Malay entrepreneurs who cash in on an array of subsidies.

While the policies are aimed at boosting the wealth of Malays, critics say corruption and poor implementation have resulted instead in the marginalisation of poorer Malaysians.