Published: 2019-06-21 12:45:58 BdST
The sex tapes, which are allegedly of Economic Affairs Minister Mohamed Azmin Ali, were widely distributed to journalists and politicians via WhatsApp last week. Sodomy is a crime in Malaysia and in the past, Anwar Ibrahim, who Mahathir has named as his successor, has spent about a decade in jail under the law.
Azmin, who is said to be close to Mahathir, denied he was in the videos, saying they were a "nefarious plot" to end his political career.
In a video posted on his Facebook page last week, Muhammad Haziq Abdul Aziz, an aide at the time to a deputy minister in Azmin's party, claimed that he was one of the men in the video and the other was Azmin.
Haziq was arrested last week and later released on police bail. He has been sacked from his post and Reuters was unable to contact him directly.
The episode has sharpened focus on whether Mahathir will stick to a promise before last year's general election to hand over power to Anwar, and the potential for political instability in Malaysia.
The uncertainty threatens to disrupt already stuttering efforts to revive a struggling economy, including Mahathir's pre-election promise to cut mounting government debt, a key benchmark of reform success for investors and ratings agencies.
Azmin, as Minister of Economic Affairs, is a central figure in stabilising public finances.
A close aide of Mahathir told Reuters the veteran leader, who is often referred to by the honorific 'Tun', would stick to the pre-election agreement unless it was taken out of his hands by a shift in consensus within the Pakatan Harapan alliance.
"Tun is prepared to fulfil his promise," the aide said, asking not to be named due the sensitivity of the matter. "Of course, if Pakatan Harapan, or the people, want someone else, then that's different."
Mahathir dismissed the sex videos as "fake" last week, angering Anwar's camp who felt he should wait until the police had investigated, people close to Anwar said.
Mahathir's office did not respond to queries on whether he has been priming Azmin as a potential successor and on the rising tensions in the coalition.
TARGETING A RIVAL
Six senior sources within the ruling Pakatan Harapan coalition told Reuters that Azmin, a 54-year-old father of six, has been targeted because he is seen as a rival to Anwar.
On Tuesday, Azmin said he was convinced the videos were the work of insiders in the Parti Keadilan Rakyat (PKR) party, the biggest component of the Pakatan alliance. Anwar and Azmin are the president and deputy president in PKR.
Azmin's office declined to comment further.
Anwar has said it was "slander" to suggest he had anything to do with the leaked footage. His office declined to comment further.
Anwar was fired as Mahathir's deputy prime minister in 1998 before he was slapped with sodomy and corruption charges, souring their relationship until they formed an unlikely alliance ahead of a shock victory in last year's election.
"The increasingly dirty battle to succeed Mahathir will exacerbate tensions within the ruling coalition, making it harder for the government to reduce the fiscal deficit and boost economic growth," said Peter Mumford, analyst at Eurasia Group.
"The jockeying for power encourages politically-motivated spending rather than cost cutting."
Mahathir has fuelled suspicion by shifting the timeline of his departure from the initially agreed two years. Most recently he has said he will serve as premier for two to three years.
"The infighting and the attacks against Azmin could potentially strengthen the case for Mahathir to delay the transition or serve out a full government term," said Adib Zalkalpi, director at political risk consultancy Bower Group Asia.
MENTORED BY MAHATHIR
Mahathir, a shrewd operator who has often taken allies and opponents by surprise in a political career spanning 70 years, has been actively nurturing Azmin, who was until recently one of Anwar's closest aides.
Azmin, a soft-spoken technocrat, was handed a powerful new ministry and oversight over some state-owned companies that are at the core of Mahathir's economic reform programme.
"Clearly Mahathir has taken steps to actively empower Azmin and to almost divide and conquer," said Eurasia's Mumford.
Anwar, a rousing public speaker who once led thousands in rallies against Mahathir, has been preparing to rule for over 20 years and members of his faction within the PKR say they are determined to ensure he becomes prime minister.
They fear a possible flip-flop by Mahathir and are garnering support from sections in the coalition to push the prime minister to announce that he will stand aside in May next year, three people familiar with the matter said.
Many in PKR acknowledged Azmin as a future prime ministerial candidate, but one lawmaker close to Anwar said he was being "unscrupulously ambitious".