John R. Malott says he warned a "very senior" official that if the government made any such claim it would be exposed as a lie.The official, he says "squirmed in his chair."

Malott, who left the Kuala Lumpur post in 1999, relates the incident in an article in the online newspaper Malaysiakini. On Monday he confirmed his comments to AFP.

The former ambassador, who left the foreign service last year, also indirectly criticises Malaysian Prime Minister Mahathir Mohamad.Malott says that before Anwar was arrested on September 20, 1998, "we heard rumours that the police were trying to claim that a tennis partner of Anwar's was a CIA agent, which we knew was not true.

"At that point, I went to a very senior official in the Malaysian government and told him officially, on behalf of my government, that Anwar was not a CIA agent.

"And if the Malaysian government arrested Anwar and claimed that he was an American agent, we would immediately issue a denial of the strongest order and challenge the Malaysian government to offer any proof to the contrary.

"And I bluntly told that individual, who is still in a very high position in the Malaysian government today, that they would be embarrassed because they never would be able to offer any proof to the contrary - because it does not exist.

"I then continued, 'You might have your internal political differences with Anwar. But if you make a false claim against the US, namely, that we have interfered in your internal affairs, and say that someone in your government is an American agent, then you are involving the US, and we will expose it for the lie it is.

"He (the official) squirmed in his chair."

The Malaysian government never publicly alleged Anwar was a CIA agent but some ruling party members made such accusations in parliament.

Anwar, sacked on September 2,1998, was jailed for six years in April 1999 for abuse of power and last month sentenced to nine more years for sodomy. The United States and other governments strongly criticised the verdict and sentence.

Malott told AFP by phone that he wrote the article because the rumours about Anwar's CIA involvement had resurfaced after the latest verdict.

In the article Malott adds that Anwar had worked for good relations with the US, Malaysia's main trading partner and foreign investor.

"In most countries in the world, when you work to improve your country's image and ties overseas, you are praised. In Malaysia, however, people with their own agenda brand you a spy."

Malott, in an apparent reference to Mahathir's actions, adds: "In most countries, if your actions and rhetoric harm your nation's interests and reputation and isolate you from the world community, you are criticised. "In KL, however, your supporters praise your courage."