Talks to finalise a partnership for Malaysia's ailing national carmaker, Proton, will be postponed until the first quarter of 2007, said Prime Minister Abdullah Ahmad Badawi.

"I was informed that it is not possible to finalise everything by the end of the year. So it will be next year, first quarter," Abdullah told reporters.

Abdullah, who is also finance minister, declined to discuss the identity of Proton's future partner.

"I cannot influence the decision by saying that," he said.

But he confirmed that local carmaker Naza Group was interested in the government's 43 percent stake in troubled Proton, owned through its investment arm Khazanah Nasional.

"Naza has expressed its intention", he said.

Naza began its operations as an importer and trader of used and reconditioned cars, but is now a fully fledged auto assembler.

Besides Naza, two other Malaysian auto companies have expressed interest in acquiring a stake in Proton, including Mofaz Group, which has teamed up with a foreign partner, and DRB-Hicom Bhd.

The government is also in talks with PSA Peugeot Citroen to discuss possible collaboration, as well as German automaker Volkswagen AG, which is reportedly keen on a majority stake in Proton's manufacturing arm.

Analysts say Proton needs to find a strong partner to help revive its fortunes after posting a quarterly loss of RM250.34 million in its second quarter to September 2006, as sales dwindled.