KUALA LUMPUR (Reuters) - Malaysia edged nearer a political turning point on Friday with uncertainty over the fate of both 94-year-old Mahathir Mohammed and rival-turned-ally Anwar Ibrahim, 72, who have vied for power for a generation.

Malaysia's Interim Prime Minister Mahathir Mohamad leaves after an event in Kuala Lumpur, Malaysia, February 28, 2020. REUTERS/Lim Huey Teng

A week of turmoil was triggered by Mahathir’s surprise resignation as prime minister, breaking an alliance with Anwar that won an election in 2018 against the corruption-tarnished former ruling party of six decades.

In the race for the premiership, former interior minister Muhyiddin Yassin, 72, has emerged as a leading candidate. From Mahathir’s camp, he also has the backing of the old ruling party, the United Malays National Organisation (UMNO).

“The nation’s fate hangs in the balance,” said Liew Chin Tong, a member of Anwar’s alliance. “All MPs and parties will have to ask the question, who do they want to work with?”

A bigger role for UMNO, which supports Malay nationalism, could mean a swing back towards an establishment that puts greater emphasis on the interest of the majority ethnic group in the Southeast Asian country of 32 million.

The drama intensified on Friday when the royal palace rejected interim Prime Minister Mahathir’s announcement that parliament would choose a new premier on Monday - a vote that might have helped him consolidate power.

Mahathir’s proposed unity government had been rejected by Anwar, whose supporters argue that he should be given the chance to tell the king he could form a government because his alliance has more seats than others.

Anwar said his Pakatan Harapan coalition “has the numbers” among the 222 elected members of parliament.

“All the MPs pledging for me have done so as individuals,” Anwar said on Twitter. “I know for a fact that some of the MPs on the ‘other side’ are unhappy that their party leaders have stolen their voice. Let’s see out this democratic process.”

But as parties scrambled to find allies on Friday, some Anwar supporters conceded in private that Muhyiddin might edge him out.

“It’s doubtful for us,” said one lawmaker from Anwar’s alliance, speaking on condition of anonymity.

MAHATHIR-BACKED CANDIDATE ADVANCES

The power struggle between Mahathir and Anwar has shaped Malaysian politics since the 1990s.

In an alliance with his long-time rival, Mahathir left retirement in 2018 to win back the post he held from 1981-2003, defeating UMNO’s then prime minister Najib Razak, who is on trial for corruption.

But tension persisted over Mahathir’s promise to one day hand power to Anwar. No precise date for that was ever set, and Anwar’s chances of finally getting the premiership appeared to recede as key political blocs swung behind Muhyiddin.

Islamist party PAS joined UMNO in backing Muhyiddin.

Gabungan Parti Sarawak, a coalition based in Sarawak on the island of Borneo, was also likely to back Muhyiddin, a senior party official said. In exchange the party would seek greater autonomy for the energy-rich region.

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Anwar, who has twice been jailed on sodomy charges he denied and said were politically motivated, has won support from Malaysians seeking change with his battle cry of “Reform”.

However, he been less trusted by traditionalists who fear losing out to large minority ethnic Chinese and Indian groups.

In a sign of the shifting political landscape, local media reported the resignation of attorney general Tommy Thomas, who had brought the corruption charges against Najib and other members of the former UMNO administration.

His appointment had been challenged by some Malay nationalists because of his Indian origins.

The political uncertainty comes at a testing time for Malaysia’s economy, which has been flagging as it deals with fallout from the coronavirus epidemic.

The main stock index .KLSE plunged 12% this week, its sharpest weekly fall since 2011, as global indices also dived.