Malaysia said today it would abandon its plans to build a controversial "half-bridge" to Singapore, which has become a major source of tension between the neighbours.

The decison was an abrupt about-face for the government which had repeatedly insisted it would go ahead with the project to replace an ageing colonial-era causeway even though Singapore has not agreed to build its half.

"The Malaysian government has decided not to proceed with the construction of a bridge to replace the Johor causeway," Prime Minister Abdullah Ahmad Badawi said in a statement, adding that all talks over the issue would be halted.

Abdullah said the decision was made after taking into consideration "the voice and sentiment of the people, particularly over the supply of sand and airspace," referring to other disputed issues between the neighbours.

Singapore maintains that Malaysia's proposal to replace the causeway with a new link would be costly and have "no significant benefits" for the island-state.

No mutual consent

It intensified its rhetoric earlier this month, saying that Malaysia could not unilaterally build a "half-bridge" because international law requires mutual consent by affected parties.

But Malaysian authorities insisted that work would continue on the bridge, at a cost of RM620 million, and that it could be fully completed in 36 months.

The bridge would have carried vehicles some 25 metres above the strait - allowing ships to pass beneath - before curving and descending to link up with the causeway at the sea border between the two countries.

Malaysian ministers reported last month that work had begun.

The two countries have squabbled for years over a variety of issues. But while many other bilateral feuds have been settled amid a thaw in relations over recent years, the bridge had remained a thorny topic.

Other outstanding issues include Singapore's request for military access to Malaysian airspace, which ordinary Malaysians have opposed, and the price of water which Malaysia supplies to resource-scarce Singapore.

The future of Malaysian-owned railway land inside Singapore, rival claims to a rocky islet and the sale of sand for Singapore's land reclamation project are also being thrashed out between the neighbours.

Domino effect

Political observers welcomed the move and said there would be a domino effect on the other disputed issues, particularly Singapore's bid for rights to Malaysian airspace.

"Had we gone ahead with the bridge unilaterally, it would be a symbol of our inability to negotiate and a symbol of our acrimonious relationship with Singapore," said Abdul Razak Baginda from the Malaysian Strategic Research Centre.

"Now that Malaysia has shown goodwill, Singapore has to reciprocate," he said that the other troublesome issues "all seem to be part of the package".

Malaysia's Foreign Minister Syed Hamid Albar said recently that "historical baggage" and emotion had hampered negotiations over the new bridge, and that lawmakers from both sides were responsible for jeopardising the project.

Since Singapore was ejected from the Malaysian federation in August 1965, relations have periodically been rocked by disputes.

However, in the past couple of years since the departure of veteran leader Mahathir Mohamad the mood had grown warmer, with more frequent high-level exchanges and cross-border investment growing.