Former premier Mahathir Mohamad is revelling in the spotlight as the region's leaders come to town, proving old habits die hard after two decades on the international stage.

Although officially retired since 2003, the irrepressible 80-year-old has grabbed attention by accusing Australia of crashing the party and launching a tirade against his former protege Anwar Ibrahim.

Mahathir, who shaped modern Malaysia during his long term in power and remains a high-profile figure on the political scene, first conceived of the summit, which holds its inaugural gathering on Wednesday.

But much to his chagrin, what was intended as a "caucus without caucasians" has now come to include Australia and New Zealand - as a counterweight to China in the absence of the United States.

"Now, Australia is basically European and it has made clear to the rest of the world that it is the deputy sheriff for America," Mahathir said acidly last week.

"I am afraid that, knowing Asians, who are always very polite and do not like to appear to be recalcitrant, the views of Australia are likely to dominate," he said.

His jab at Australia, whose then-premier Paul Keating dubbed him "recalcitrant" for refusing to attend a 1993 regional summit, apparently hit the mark.

Australia's Foreign Minister Alexander Downer on Saturday lashed out at a reporter who relayed the suggestion that his country would act as a proxy for America in a new 16-nation bloc.

"I think even you could move beyond the puerile allegations of a 'deputy sheriff,'" he snapped at a reporter.

It was left to Foreign Minister Syed Hamid Albar to defend Canberra's presence, saying the summit had moved beyond a geographical definition that would have excluded Australia.

Mahathir handed over to current Prime Minister Abdullah Ahmad Badawi two years ago, but the new administration is still trying to step out of the shadow of the long-time leader who remains one of Asia's best-known political figures.

New broadside against Anwar

He held court again over the weekend, issuing a new broadside against his one-time deputy Anwar, who was sacked in 1998 and jailed on corruption and sodomy charges.

Anwar was freed in September 2004 after six years behind bars, and is now storming back onto Malaysia's political landscape with new leadership ambitions.

But Mahathir maintained on Saturday that although Anwar's sodomy conviction has been overturned, he was still not in the clear and should accept that his political days are over - just like his own.

"The judge said he was involved in homosexual acts but not on that day. He is not fully innocent," he said.

"It is time for younger leaders now. There may be in the future an opportunity for him to make a comeback. But he will be old by then. His chances are very slim."

Mahathir said he hoped that the ruling Umno that has produced every Malaysian prime minister since independence from Britain in 1957 would not take Anwar back.

"I would be sorry if Umno were to agree to his comeback," he said. "(But) Anwar is quite capable of doing things you do not expect of him ... it would not be surprising if he joined Umno."

Once considered an Asian political star, Anwar was famously beaten up by the then-police chief after his arrest, a saga that made world headlines.

The row is still being fought in the courts, and Anwar was this year awarded RM4.5 million in damages over a book that aired the sodomy allegations.

He also won a public apology over the beating as well as undisclosed damages, a result he hailed as a step forward for human rights in the country.