The government has been urged to lift a ban on construction of the world's tallest Taoist Goddess of the Sea statue in Sabah in the latest row over sensitive racial and religious issues.

Opposition leader Lim Kit Siang, who heads DAP, warned that if the row was not resolved it could hurt racial harmony in the country.

"The insensitive controversy objecting to the building of the Mazu statue is created by a small group of Muslims with ulterior political objectives, which set a dangerous precedent in undermining inter-religious goodwill in Malaysia," he said.

Local authorities in the fishing village of Kudat in Sabah had approved construction of the 36-metre Mazu statue in December 2005.

Workers had completed the platform when the state government ordered work be halted. The state mufti last July followed up with a religious decree that the statue would offend Islam.

Sabah's deputy chief minister resigned in protest and in early December filed a legal suit challenging the order to halt construction.

Lim said the issue had been mishandled by the government.

"The controversy undermines nation-building, inter-religious understanding and makes Malaysia an international laughing stock," he said.

Growing Islamisation

Malaysian commentators have sounded alarm over the growing 'Islamisation' of the country and the increasing polarisation of the three main ethnic communities, which mix much less than in the past.

Religion and language are sensitive issues in multiracial Malaysia.

In recent weeks there have been controversies over a Catholic newspaper's use of the word 'Allah' and Islamic Syariah Court cases between Muslims and their non-Muslim spouses.

Meanwhile, five Hindu rights activists have also been detained under a tough security law following a mass rally alleging discrimination against ethnic Indians in Malaysia.