(AFP) - Prime Minister Dr Mahathir Mohamad has hinted that the country could face an early election next year and has not yet decided whether to retire, a report said today.

"I do not think we will call for an early election ... but there's also a possibility that we will hold it one year earlier, that is in 2003," the Chinese daily Sin Chew Jit Poh cited Mahathir as telling Taiwanese academics in an interview.

The government's five-year term is due to end in late 2004.

Asked whether he would seek re-election, Mahathir, 76, said: "Currently, I have not decided yet."

The prime minister, who has been in power for more than 20 years, added that he wanted to complete work "that is beneficial to the people and the country".

On other issues, Mahathir said he would not further Islamise multi-cultural Malaysia, which has large ethnic Chinese and Indian minorities.

He believes non-Muslims are happy with the current state of affairs, under which they are allowed to follow their own faiths although Islam is the official religion, the paper reported.

Privileges to remain

The opposition PAS, which wants to create a theocratic Islamic state, made major gains in 1999 elections but is widely believed to have lost support since the Sept 11 terror attacks on the United States.

As for the special privileges in education and business enjoyed by ethnic Malays, Mahathir said these would not be abolished until they could compete on equal footing with the Chinese and Indians.

He said it was possible to have an ethnic Chinese prime minister in future if the leader was acceptable to all communities.