Malaysia's premier called on Wednesday for fresh elections he is certain to win, and kicked off a campaign likely to be dominated by racial issues as religious tension rises in the southeast Asian nation.

Prime Minister Abdullah Ahmad Badawi told reporters he had received consent from the country's king to dissolve parliament, effective Wednesday, and call for fresh elections.

"The king has signed the declaration of dissolution of parliament today," Abdullah told a news conference at his imposing green-domed office in Malaysia's administrative capital.

"We hope to get a big majority, at least two thirds, God willing."

The country's election authorities would decide the nomination and polling dates, he added.

Analysts expect Abdullah's ruling coalition, the Barisan Nasional, to win, although with a reduced majority. The vote is crucial for the opposition, with the future of its de facto leader, Anwar Ibrahim, at stake.

"I don't think Barisan Nasional will be able to repeat its 2004 victory," political analyst Chandra Muzaffar told Reuters. "As we get closer to election day, Barisan Nasional, because of its very powerful machinery, would be able to ensure a very, very comfortable victory."

Earlier, a source close to Abdullah told Reuters the Election Commission would decide on the poll date in the coming days, but it was likely to be held within the first 10 days of March.

The Election Commission has called a news conference for Thursday, an official said, but gave no details.

After months of feverish poll speculation, markets took the news in stride, with the benchmark index up less than one percent at 1,428.13 points in the afternoon session.

BEFORE THINGS GET WORSE

Polls had not been due until May 16, 2009, and Abdullah gave no reason for calling an early election, but analysts had expected him to seek a fresh mandate before the trade-dependent economy begins to slow and inflation picks up steam.

"They want to get over with the elections before things get worse," said political analyst Ooi Kee Beng, of the Institute of Southeast Asian Studies in neighbouring Singapore.

A March election would also cut out opposition leader Anwar, who is barred from standing for public office until April because of his past criminal conviction, though Abdullah denies this influenced the timing of the poll.

Opposition parties complain that the electorate is gerrymandered in favour of mainly rural Malays, that the pro-government media gives themhort shrfit and campaigning rules favour the incumbents.

"We, the opposition, almost have to fight this out in the dark," Nasharuddin Mat Isa, deputy president of the hardline Islamist Parti Islam se-Malaysia, told Reuters.

"This is going to be tough for us, as it's an uneven playing field and when the government has all the advantage in terms of money and resources."

Abdullah saw the king at 9 a.m. (1 a.m. British time) to get his consent to dissolve parliament, the source close to the premier said.

In power since 2003, Abdullah is trying to shore up his own popularity, which has been dented by public anger over rising prices, street crime and an influx of cheap foreign labour.

Abdullah, who took over from Mahathir Mohamad, led his ruling coalition to a record victory in 2004 elections on a pledge to clean up government.

But he said recently the coalition, which has ruled since independence in 1957, was unlikely to repeat its 2004 performance amid growing unease among ethnic Chinese and Indian minorities.

"He knows that he will not be able to resolve inter-ethnic problems in the country and that waiting longer would only cause sentiments to slide away from the coalition even further," Tian Chua, spokesman for Anwar's Keadilan party, told Reuters.

After months of feverish poll speculation, markets took the news in stride, with the benchmark index up less than one percent at 1,428.13 points in the afternoon session.