Walt Disney Co is holding talks with Malyasia's investment arm Khazanah Nasional about developing a theme park in southern Johor state facing Singapore.

The Edge , a business weekly, said Walt Disney officials met officials from Khazanah last week on developing a park in the Iskandar Development Region.

"They (Walt Disney) met Khazanah managing director Azman Mokhtar and had discussions with other top Khazanah executives," it said.

But it said Khazanah was also in negotiations with other theme park players including Warner Brothers.

The Edge said Khazanah would make a decision on its choice of partner by year's end.

The report comes amid ongoing construction work on the Universal Studios theme park in Singapore.

Muslim-majority Malaysia has embarked on an ambitious development plan to spread growth and jobs in Johor, and has been keen to attract investment from the Middle East.

Prime Minister Abdullah Ahmad Badawi hopes to attract RM50 billion to the Iskandar Development Region over five years.