Malaysia might axe a visa programme that has enabled more than 40,000 foreigners to stay in the country illegally in the last year, a report said Thursday.

Some 120,000 visitors have entered Malaysia under the programme, which began in September 2006 and allows visitors to apply for a one-month visa when they arrive, Home Affairs Minister Mohammad Radzi Sheikh Ahmad told The Star daily.

But one-third of the visitors did not leave when their visa expired, he said.

"There are a lot of problems arising from the VOA (visa-on-arrival) and I feel it is my duty to inform the cabinet of the repercussions of introducing the VOA," Mohammad Radzi told the paper after the regular weekly cabinet meeting.

"Extending the facility will only spell more problems and will open the country to the risk of more illegal immigrants," he said.

The expanded visa program was offered to citizens from 24 countries that previously required a visa in advance to enter Malaysia -- such as Bangladesh, India, Myanmar, Nepal and Nigeria.

Most of the overstayers were Indians who had remained in Malaysia to work in restaurants and on plantations, the paper said, citing an immigration department report.

Last December, Malaysia stopped issuing the visas to tourists arriving from the southern Indian city of Chennai after finding many were using the permit to overstay.

The government will not make a hasty decision about the programme's future, Mohammad Radzi said.

Since a tourism campaign, "Visit Malaysia 2007," will end in two months, "the cabinet has agreed to wait till then before deciding on the next course of action," he said.

The "Visit Malaysia" campaign is aimed at attracting 20.1 million tourists in 2007 and to draw in receipts of some 44.5 billion ringgit (13.2 billion dollars).

Tourism is Malaysia's second-largest foreign exchange earner but it faces stiff competition from neighbours Singapore and Thailand.