Malaysian Prime Minister Mahathir Mohamad has said he wants to develop an island on a cluster of rocks previously disputed with Singapore, in a move that could anger its neighbour.
The strategically-located area has long been a flashpoint between Kuala Lumpur and Singapore, and they previously took a territorial dispute to the United Nations top court.
The International Court of Justice in 2008 awarded two rock clusters, called Middle Rocks, to Malaysia while a nearby island was deemed to be Singaporean territory.
Malaysia launched a challenge to that ruling last year but Singapore's foreign ministry said Wednesday it had been withdrawn by Kuala Lumpur.
However, at the same time, Mahathir announced Malaysia wanted to develop an island on Middle Rocks, at the eastern entrance of the strategic Singapore Strait.
The 100-kilometre strait is one of the world's busiest commercial shipping routes, with vessels using it to access the city-state's port.
"It is our intention to enlarge Middle Rocks into a small island for us," the 92-year-old - who started his second stint as premier this month after a surprise election win - told a press conference.
He gave no more details about what the proposed island would look like or how long it would take to build.
Prime Minister Mahathir Mohamad. Source: AAP
Mahathir added that Malaysia had already built a structure on Middle Rocks. Reports said Malaysia inaugurated a maritime base there last year.
James Chin, a Malaysia expert from the University of Tasmania, told AFP that Singapore would see the move as "hostile".
"Among the Singapore elite, they will see it as part of Mahathir's anti-Singapore stance," he said.
It came after Mahathir announced this week that he was scrapping a planned high-speed railway between Kuala Lumpur and Singapore, as he seeks to improve the nation's finances.
Both developments are likely to alarm the Singapore government, already wary of Mahathir's return as ties between the neighbours were famously stormy during his first stint as premier from 1981-2003.
Still, Kuala Lumpur's decision to drop its case at the ICJ could assuage fears.
Malaysia had lodged its challenge in February 2017, calling for the court to overturn its earlier ruling granting its neighbour sovereignty over the disputed island.
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