KUALA LUMPUR (Reuters) - Malaysian Prime Minister Mahathir Mohamad said on Friday Hong Kong leader Carrie Lam should step down following months of protests against her government, Malaysian media reported.

Growing opposition to the Hong Kong government has plunged the financial hub into its biggest political crisis in decades and poses the gravest popular challenge to Chinese President Xi Jinping since he came to power in 2012.

Speaking at a conference in Kuala Lumpur, Mahathir, referring to Beijing, said Lam "has to obey the masters and at the same time she has to ask her conscience", according to online news portal MalaysiaKini.

"I think best thing is to resign," Mahathir said.

The protests in Hong Kong began over a now-withdrawn extradition bill, which would have allowed people to be sent to mainland China for trial, and have intensified markedly since June. They have also evolved into wider calls for democracy, among other demands.

Mahathir, 94, is one of Asia's most experienced leaders. He was prime minister for 22 years from 1981, only to come out of retirement last year to head a government after an opposition election victory.

(Reporting by A. Ananthalakshmi; Editing by Robert Birsel)