KUALA LUMPUR — Malaysian prime minister Muhyiddin Yassin on Tuesday (Dec 15) passed an important test of his parliamentary support after a narrow majority of lawmakers approved his 2021 budget at the final stage amid a challenge by the opposition.

The result could signal firmer footing for Mr Muhyiddin, whose eight months in office have been beset by infighting in his ruling coalition and a leadership challenge from opposition leader Anwar Ibrahim, just as the country grapples with the economic and health crises caused by the coronavirus pandemic.

Parliament voted 111-108 to approve next year's budget, a record 322.5 billion ringgit (S$106.2 billion) of spending aimed at spurring economic activity.

The benchmark KLSE closed 0.68 per cent higher after the budget vote, while the ringgit was little moved.

Mr Muhyiddin had also avoided a potential political crisis last month, after the opposition backed down from a plan to vote down the budget at the end of the policy stage debate.

A defeat would have been signalled a loss of confidence in Mr Muhyiddin's leadership, possibly triggering snap polls.

Tuesday's vote also dents Mr Anwar's bid for the premiership, after he declared in September he had secured a strong majority in parliament to form a government and replace Mr Muhyiddin.

Two opposition sources on Monday said Mr Anwar believed he had secured 113 lawmakers to defeat the budget at the final stage, including up to 10 members from the United Malays National Organisation (Umno) former ruling party led by party president Ahmad Zahid Hamidi and former premier Najib Razak.

Mr Anwar and Mr Najib's offices declined to comment, while Mr Ahmad Zahid's representative did not have any immediate comment.

Mr Anwar has for months been rumoured to be holding talks with Umno leaders, but Tuesday's failure to defeat the budget means he will need to rethink his strategy, some analysts said.

"It's clear now Muhyiddin won't be removed through parliament. Anwar working with Umno to be made prime minister is not an option," said Mr Adib Zalkapli, Malaysia director with political risk consultancy BowerGroupAsia. REUTERS