Malaysian opposition figure Anwar Ibrahim has been arrested, his lawyer said on Wednesday, setting the stage for a political showdown that could further rattle the country's financial markets.
The former deputy premier had agreed to meet police on Wednesday on a sodomy complaint lodged by a former aide, and police had warned they would arrest him if he did not show up.
Anwar's lawyers had said he would go to the police for questioning at 0600 GMT, but the arrest came about an hour before that.
"This is most unbecoming," Sankara Nair, Anwar's lawyer, told reporters. "We have agreed to come. This is not right."
Anwar, who is leading a charge by the opposition to seize power by September, is fighting the sodomy accusation, in a replay of scenes from a decade ago when when he was jailed for sodomy and corruption and his political rise snuffed out.
Anwar's supporters have cast the sodomy allegation as an attempt by premier Abdullah Ahmad Badawi's government to prevent the opposition from gaining ground.
The arrest is likely to spark more tremors in financial markets, which have groaned under the weight of a protracted political drama that includes allegations of sex and murder against a senior government politician.
"Investors will probably shy away for a while until these things settle," said Wee Kim Hong, head of research at M&A Securities.
"I don't think anybody will want to commit to a long position for now."
Malaysia's ringgit currency had weakened to 3.2260 to the dollar as of early afternoon from 3.2160 on Tuesday. The stock market was down 0.23 per cent to 1,125.03 points by midday, before news of Anwar's arrest. It has fallen about 5 per cent since the start of July.
The authorities sealed off roads to the police headquarters where Anwar had been brought, while a water cannon was on standby and a helicopter circled overhead, as the authorities braced for a possible repeat of 1998 protests.
Anwar's arrest then brought tens of thousands onto the streets.
He was sacked as deputy prime minister in 1998 and later jailed for corruption and sodomy after leading street protests against then premier Mahathir Mohamad's government during the Asian financial crisis.
The supreme court overturned the sodomy conviction six years later.
Anwar had earlier on Monday appealed for his supporters to remain calm if he was arrested.
"I appeal to them to exercise patience and let us deal with this according to standard procedures," he said.
"We will challenge on every ground."
He was speaking to reporters after meeting anti-corruption agency officials over his claim the attorney-general and police chief fabricated evidence in his assault case a decade ago.
Abdullah's Barisan Nasional coalition is still trying to recover from a disastrous showing in a March general election, where it lost its two-thirds parliamentary majority and ceded five states to the opposition.
Anwar was barred from standing in that election, but hopes a resurgent opposition can force a new vote for which he will be eligible.
Public anger against rising prices and a series of political dramas have added to the government's unpopularity.