Singapore's relations with its majority Muslim neighbours Indonesia and Malaysia will not always be smooth sailing, the city-state's founding father Lee Kuan Yew said in remarks published on Sunday.

"We always have ups and downs in relations with Malaysia and Indonesia," Lee was quoted as saying in the Sunday Times.

"There will always be groups in Malaysia and Indonesia who expect Singaporeans and their government to be as accommodating as their ethnic Chinese citizens," he said.

Lee cited the adverse reactions of local politicians in the two neighbours to Singapore's support for a business hub in Malaysia's southern Johor state and a newly signed defence cooperation agreement with Indonesia as examples.

"The chorus of protest voices sours up grassroots support for the leaders, and for cooperation projects with Singapore which benefit their own countries," said Lee.

"It is non-stop politicking to deny any credit to the Abdullah Badawi (Malaysian Prime Minister) or SBY (Indonesian President Susilo Bambang Yuddhoyono) governments," he said.

Support for IDR

Lee, Singapore's first premier who now serves in the cabinet of his son Prime Minister Lee Hsien Loong, said the city-state would not be affected by the occasional blips in bilateral relations and would work to strengthen ties.

"Singaporeans have got used to these ups and downs over many years... they will not be rattled," Lee, 83, said.

"Singapore will stick to international law and all agreements we have with other countries, and work patiently for better relations with our neighbours," he said.

On Malaysia's plans for the Iskandar Development Region business hub project in Johor state, Lee said the proposed economic zone would benefit the two neighbours.

While Singapore faces the prospect of losing jobs and industries to the project, Lee said "from a broader perspective, it is better for both countries that Malaysia benefits from Singapore's economic growth, and vice versa."

"Hence Singapore supports the IDR, on a win-win basis," he said.

Lee served as Singapore's prime minister from 1959 to 1990 and remains an influential adviser to the cabinet with the special title of minister mentor.