KUALA LUMPUR (Reuters) - Malaysia is investigating an international atheist organization, a minister said on Monday, after a picture of the group's local chapter went viral, sparking claims that Muslim apostates were involved.

Apostasy is not a federal crime in Malaysia, a multi-ethnic and multi-religious country. But critics say deepening fundamentalism within the Muslim majority is threatening religious freedoms.

Malaysian states, which have their own laws governing Islamic affairs, do not allow Muslims to formally renounce Islam, preferring instead to send them for counseling, or fining or jailing them.

The Kuala Lumpur chapter of Atheist Republic, a Canada-based organization, posted a picture of the group's members attending a gathering last week, sparking uproar among some Muslims and leading to threats of death and violence against the group on social media.

Malaysia's deputy minister in charge of religious affairs, Asyraf Wajdi Dusuki, said on Monday he had instructed the Federal Territories Islamic Religious Department to investigate the Atheist Republic chapter to see if any Muslims were involved.

"We need to determine whether any Muslims attended the gathering, and whether they are involved in spreading such views, which can jeopardize the aqidah (faith) of Muslims," he told Reuters when contacted.

Ex-Muslims in the group would be sent for counseling, while attempts to spread atheist ideas could be prosecuted under existing laws, Asyraf said.

"We need to use the soft approach with (apostates). Perhaps they are ignorant of the true Islam, so we need to engage them and educate them on the right teachings," he said.

Atheist Republic's founder, Armin Navabi, said the group's gatherings caused no harm to the public and were not considered a threat in other countries.

"They (Atheists) are treated like criminals. They are just hanging out and meeting other atheists. Who are they harming?!" he said in a post on his Facebook account.

Malaysia's apostasy laws have left many former Muslims in legal limbo, as they are not allowed to register their new religious affiliations or legally marry non-Muslims.

In 2007, Lina Joy, a Malaysian convert to Christianity, lost a high-profile legal battle to have the word "Islam" removed from her identity card. In delivering judgment in that case, the Federal Court's chief justice said the issue was related to Islamic law, and civil courts could not intervene.

(Reporting by Rozanna Latiff; Editing by Nick Macfie)