Jailed Malaysian political leader Anwar Ibrahim released from prison

Mahathir Mohamad insisted that he respected the right to freedom of speech but the move is likely to alarm liberals

He has been in hospital for a few months recovering from a shoulder operation. He says the funds were political donations from a Saudi royal family member.

Anwar, whose sodomy conviction is believed by supporters to have been concocted by Najib to derail the opposition, is expected to be pardoned by the country's king on Wednesday and released.

Mahathir told the Wall Street Journal on Tuesday he would be in power for one to two years, before an expected handover to Anwar, who is due to be released on Wednesday.

Mahathir has said he expects to run the government for up to two years during an uncertain transition period but has signalled the reins would be turned over to Anwar eventually.

Anwar was freed in 2004 but in 2015, he was jailed again - for five years - for sodomizing a former aide, a charge he and his supporters describe as a politically motivated attempt by Najib to end his career.

The volatile relationship between Anwar and Mahathir, from friends to foes to allies, has dominated Malaysia's political landscape for more than three decades and is central to the future of the alliance.

But in one of Malaysia's many political twists, Mahathir came out of retirement, determined to oust Najib over accusations that he had presided over the looting of billions of dollars from a state investment fund, a scandal that has tarnished Malaysia worldwide.

Mr Mahathir has promised to step aside for Mr Anwar to become prime minister within two years.

PKR communications director Fahmi Fadzil said earlier that Anwar is scheduled to hold a press conference at his home in Segambut at around 4pm.

He said no final decision had been made on a Cabinet position.

"The first question I am taking is from TV3", he joked, alluding to the fact that the TV station had carried a lot of negative stories about him and other Pakatan Harapan (PH) leaders in the past before the pact took over Putrajaya. "There will be no special powers given except as are given to ministers or deputy ministers or deputy prime ministers", Mahathir said. Anwar became Mahathir's heir apparent, but they fell out during the 1998 Asian financial crisis and Anwar was sacked.

In an astonishing U-turn a year ago, Anwar shook hands with Mahathir and agreed to join forces to oust scandal-tainted Najib.

"Seeing him walk free makes me emotional, but the fight is not over", said Ridzuan Ismail, an Anwar supporter at the hospital.

Mahathir is the leader of the ruling alliance and Anwar's People's Justice Party (PKR) won the majority of parliamentary seats in the group.

In his Tuesday remarks, Mahathir said whether Najib would serve time in jail would depend on the results of a probe into the scandal.

After barring Najib and his wife Rosmah Mansor from leaving the country on Saturday, the leader said criminal charges may be imminent.

Mahathir has replaced the attorney-general and officials at the anti-graft agency, in what appears to be a purge of people seen as close to the former premier.

The agenda for the Mahathir government includes scrapping a goods-and-services tax, reviewing large infrastructure projects, reintroducing fuel subsidies and cutting spending.

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