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Update: Malaysia PM Najib removes deputy after public sparring

Malaysian Prime Minister Najib Razak removed his deputy as he seeks to head off a public rift within his cabinet over the handling of financial probes into a debt-ridden state investment company.

[KUALA LUMPUR] Malaysian Prime Minister Najib Razak removed his deputy as he seeks to head off a public rift within his cabinet over the handling of financial probes into a debt-ridden state investment company.

Facing his biggest crisis in six years in power, Mr Najib named Ahmad Zahid Hamidi to replace Muhyiddin Yassin, who had called for answers on the 1Malaysia Development Bhd imbroglio including its investment decisions.

"I must have a solid and unified team moving in the same direction," Mr Najib said in televised remarks, calling the decision to replace Muhyiddin a difficult one. "I welcome vigorous debate, and can accept dissent and criticism. However, this process should take place in cabinet as part of the decision-making process. Members of the cabinet should not air their differences in an open forum that can affect public opinion against the government and Malaysia." Multiple probes are under way into 1MDB, with the Wall Street Journal reporting on July 3 that US$700 million may have moved through government agencies and state-linked firms to accounts bearing Mr Najib's name. The premier has denied taking money for personal gain and has described the furore as political sabotage, part of a campaign to remove him from office.

Mr Zahid, who is home minister, and Defense Minister Hishammuddin Hussein are among cabinet members expressing support for Mr Najib. Mr Muhyiddin had earlier called on Mr Najib to give a detailed explanation or denial of the claims, and on Sunday said Malaysians want "the real truth" on 1MDB.

The government also said on Tuesday it's replacing attorney general Abdul Gani Patail for health reasons, with former Federal Court judge Mohamed Apandi Ali stepping into the role. The attorney general's office is part of a task force investigating the money trail claims made against Najib.

Controversy over 1MDB's finances has dogged Mr Najib for months, though an initial audit report didn't reveal any suspicious activity. Mr Najib chairs the advisory board of 1MDB and has resisted calls from ex-premier Mahathir Mohamad to step down over the fund's performance as it amassed about 42 billion ringgit (S$15 billion) of debt in less than five years.

Mr Najib, 62, last reshuffled the cabinet in June 2014 when he named six members from his coalition's Chinese parties to key posts. He stocked the cabinet with stalwarts of his ruling United Malays National Organisation after the 2013 ballot.

Mr Najib doubles as finance minister and is party chief. Mr Muhyiddin is deputy president of Umno while Zahid and Hishammuddin are vice presidents.

Mr Najib told Malaysians in a speech this month to be wary of threats, including interference from foreign powers that may undermine the country's stability and sovereignty. Mr Zahid has said attempts to undermine the government could be a threat to national security.

If elections took place now it's unlikely the ruling Umno-led Barisan Nasional coalition would win, Mr Muhyiddin said Sunday. At the last ballot in 2013, the coalition lost the popular vote for the first time even as it retained office.

Mr Najib's office said on Monday that infighting within Umno over 1MDB would erode support for the government and the party.

The premier has built a support network since coming to power in 2009 that ranges from government ministers to party division heads. He's rallied rank and file members with a variety of pro-Malay policies in the past 18 months.

There are issues chipping away though at his popularity. Economic growth is slowing and he's still working to bed down an unpopular goods and services tax. The most recent major opinion poll conducted in January showed his approval rating at 44 per cent from 48 per cent in October, near a record low of 42 percent at the start of last year.