KUALA LUMPUR (Reuters) - Three Malaysian opposition parties announced an alliance on Tuesday, forming a united front against the scandal-hit government of Prime Minister Najib Razak.
While a political storm has raged around Najib for months over alleged corruption and mismanagement at indebted state-fund 1Malaysia Development, opposition parties have been in disarray.
Amid mounting calls for Najib to quit, rival parties have come together once again, this time without the main Islamist party whose push for the introduction of an Islamic penal code had caused the previous alliance to break apart in June.
The People's Justice Party, led by jailed opposition leader Anwar Ibrahim, and the largely ethnic Chinese Democratic Action Party (DAP) has this time joined hands with the small, newly-formed Parti Amanah Negara, whose members had broken away from the main Islamist opposition party.
Led by Anwar, the previous alliance, including the main Islamist party, Parti Islam se-Malaysia (PAS), inflicted the worst ever result on Najib's ruling coalition in the 2013 election.
In February, Anwar was sentenced to a five-year jail term after a sodomy conviction that he and independent observers said was politically motivated.
Anwar's wife, Wan Azizah Ismail, will head the new alliance, called Pakatan Harapan, or the Alliance of Hope.
"The crisis this country faces has encouraged the opposition parties to unite and more effectively fight UMNO and Barisan Nasional," Wan Azizah told a news conference.
"We want to change the government and the institution of governance that is giving the prime minister ways and means to abuse it," said Wan Azizah.
Najib's United Malays National Organization (UMNO) has led Malaysia since independence from British colonial rule in 1957, standing at the head of a multi-ethnic ruling coalition called Barisan Nasional.
Last month, tens of thousands of protesters gathered in a two-day rally last month calling for Najib to step down.
The controversy over 1MDB hit crisis point for Najib in July, after the Wall Street Journal reported that nearly $700 million had been deposited into a private bank account in his name. Najib has denied taking any money for personal gain, and Malaysia's anti-corruption commission said the money was a donation from the Middle East.
Authorities in several countries, including the U.S. Federal Bureau of Investigation, however, are investigating transactions involving 1MDB, whose advisory board is chaired by Najib.
The New York Times reported on Tuesday a U.S. federal grand jury was examining allegations of corruption involving Najib and people close to him.
The terms of the opposition alliance were under discussion, but it had been agreed that it would nominate Anwar as prime minister if it wins the next general election.
PAS declined an invitation to attend talks to form the new block, but Wan Azizah said the door remained open.
Reporting By Al-Zaquan Amer Hamzah; Editing by Praveen Menon and Simon Cameron-Moore