Malaysia's prime minister has announced plans to repeal a colonial-era law curbing free speech in the latest political reform before general elections, but critics have warned that his reform efforts so far have not improved the country's human rights record.

Najib Razak said on Wednesday night that the Sedition Act represented a bygone era and would be replaced with a new law to prevent incitement of religious or racial hatred. It will be the latest repressive law to be annulled as part of his pledge to protect civil liberties.

Opposition leaders claim the reforms are a ploy to gain public support before polls that must be called next year at the latest.

"We mark another step forward in Malaysia's development. The new National Harmony Act will balance the right of freedom of expression as enshrined in the constitution, while at the same time ensuring that all races and religions are protected," Najib said.

This year the government revoked a draconian security law allowing detention without trial and eased public assembly rules in a massive overhaul of strict security laws. Critics said the reforms were a sham as the laws were replaced with legislation that is just as repressive.

"The replacement legislation has been as bad or worse from a rights perspective," said Phil Robertson, Asia deputy director for Human Rights Watch. "The government should realise that change for change's sake is not enough."

Lim Guan Eng, the chief minister of opposition-ruled Penang state, said the sedition law had long been used as a convenient political tool to silence opposition voices. Lim was jailed for 18 months under the law in 1998 for allegedly making seditious remarks in his defence of a rape victim.

Lim urged Najib to withdraw current sedition charges against opposition leaders to prove his move was genuine.

Najib's coalition has led Malaysia since independence in 1957 but suffered its worst electoral performance ever in 2008. It now has slightly less than a two-thirds majority in parliament and is working hard to claw back support.

The opposition leader, Anwar Ibrahim, has said he is confident his three-party alliance can win a comfortable majority in upcoming polls amid widespread public unhappiness over the government's handling of corruption and racial discrimination.