Kuala Lumpur - Malaysian Prime Minister Abdullah Ahmad Badawi on Wednesday suspended a veteran politician who made racist remarks against the ethnic Chinese community.

Following a special meeting, Abdullah said Ahmad Ismail has been stripped of his post as a district chief in the United Malays National Organization (UMNO) party, and would be barred from the party for three years.

During a speech last month, Ahmad said the Chinese were "immigrants" and "squatters" who had no right to demand privileges or equal treatment with the majority ethnic Malays.

Ahmad, who is an ethnic Malay, had defended his remarks and remained unapologetic despite calls by community leaders for an apology.

Abdullah's UMNO is the backbone of the 14-member ruling National Front coalition, which includes parties representing all Malaysia's races, including the Malays and the minority Chinese, Indians and others.

Last week, Deputy Prime Minister Najib Razak issued an apology, saying that Ahmad's comments did not reflect the sentiments of the party leadership.

Malaysia recently celebrated its 51 years of independence from British rule, but increasing racial tensions have overshadowed the celebrations.

Malay Muslims make up about 60 per cent of Malaysia's 27 million people.

Most of the minority Chinese and Indian Malaysians are descendants of 19th and early 20th century immigrants who came as traders, laborers and miners during British colonial rule.

Both minority communities have recently complained about an almost 40-year-old affirmative action policy which gives privileges to Malays over other races in the areas of economic wealth and education, among others. (dpa)