Update: Mahathir quits Malaysia ruling party as spat with Najib worsens

[KUALA LUMPUR] Former Malaysian premier Mahathir Mohamad said he is quitting the party he led for more than two decades, increasing the stakes in his months long campaign to oust Prime Minister Najib Razak.

Mahathir, 90, said the United Malays National Organisation - the largest party in the ruling coalition - no longer exists as he knows it and has been "hijacked" by Najib, who is its president. Mahathir told reporters on Monday that he doesn't want to be associated with a party whose leader has been tarnished by political scandals.

Mahathir, whose influence has waned in recent years, has a history of leaving the party since the late 1960s. He's been a vocal critic of Najib and has repeatedly called for the premier to resign, warning UMNO could otherwise lose the next election which must be held by 2018. Authorities are conducting several investigations into Mahathir, the country's longest-serving leader, including for potential defamation.

Malaysia's attorney general closed the door on a graftprobe of Najib last month, clearing him of wrongdoing over a "personal contribution" of US$681 million from Saudi Arabia's royal family, and money from a company linked to a state investment fund that appeared in his personal bank accounts. Under the constitution, a decision to start a criminal prosecution lies solely with the attorney general. Najib has consistently denied any wrongdoing.

"I am very much ashamed of all that is happening," Mahathir said at a briefing in the administrative capital of Putrajaya. "I don't want to be a party to all this and that's why I am leaving the party. In short, I have made up my mind." Mahathir had said for months that he didn't intend to leave UMNO. He said Monday there are no plans to set up a new party as it would create confusion and disunity. Najib's office didn't immediately comment on Mahathir's announcement.

It's the second time in the past decade that Mahathir is quitting the party to protest a chosen successor. In May 2008 he left over the leadership of then-premier Abdullah Ahmad Badawi, who he'd picked to replace him in 2003. Abdullah stepped down in 2009 to make way for Najib, whom Mahathir had endorsed and he rejoined UMNO that year.

Mahathir had also left UMNO before that: In 1969 he was expelled for a period after criticizing the leadership of then- Prime Minister Tunku Abdul Rahman, and in 1988 the party was dissolved following election irregularities. He formed a party called 'New UMNO' in 1988.

UMNO last week suspended its deputy president Muhyiddin Yassin for undermining the organization in his quest to oust Najib, the latest indication of the premier strengthening his grip on power after months of political turmoil.

BLOOMBERG