Malaysian Prime Minister Abdullah Ahmad Badawi said the resignation of Thai leader Thaksin Shinawatra would make no difference to relations between the neighbouring countries.

"We do not liaise with individuals, we liaise with the government. Therefore diplomatic ties with the government will continue," Abdullah was quoted as saying by the Bernama news agency.

"There will continue to be cooperation," he said.

Thaksin, who resigned Tuesday after months of demonstrations, has appointed his deputy Chidchai Vanasatidya to replace him as caretaker prime minister.

Abdullah said he was confident Thailand would resolve its problems.

"We wish them the best of luck and we know they will be able to handle it in the best manner possible," he said.

Diplomatic row

Malaysia-Thai relations were put to the test late last year over a group of 131 Thai Muslims who fled over the border from their homes in southern Thailand, citing fear of persecution by Thaksin's administration.

Their flight triggered a diplomatic row between Thailand and Muslim dominated Malaysia, who insisted the group should not be forced to return if their safety could not be assured.

At the height of the row in October Thailand's foreign minister declared he had stopped speaking with Malaysia.

Relations began to improve in December after Malaysia extradited one of the 131, a Thai man wanted for his links to a Muslim insurgency in Thailand's south.