By Brenda Goh and Shadi Bushra
LONDON (Reuters) - Malaysia's Prime Minister Najib Razak defended a court ruling banning a Christian newspaper from using the word "Allah" to refer to God, saying on Thursday it would help ensure stability.
The court decision this month fanned religious tensions and raised questions over minority rights in the mainly Muslim country.
Christians there have used the word for centuries, but the three Muslim judges ruled The Herald's usage of it in its Malay edition would "cause confusion in the community".
"People must understand that there are sensitivities in Malaysia, but what is important is public security and national harmony," Najib told Reuters Insider in an interview.
He sought to clarify confusion over the scope of the ruling, saying it only covered the newspaper and would not stop people using the word in predominantly Christian areas.
"With respect to the court ruling it only applies to The Herald paper, which has got wide circulation, and doesn't apply to the situation in Sabah and Sarawak. So what we're trying to do objectively above all is to ensure stability and national harmony," he said on the sidelines of the World Islamic Economic Forum in London.
Najib has in recent months sought to solidify his support among majority ethnic Malays, who are Muslim by law.
His government has toughened security laws and strengthened a decades-old affirmative action policy for ethnic Malays, reversing liberal reforms that were aimed at a broader section of multi-ethnic Malaysia.
Najib said he did not expect such moves to hit investor sentiment, saying that the government was strengthening its relationships with foreign and domestic investors.
He promised he would monitor the situation closely to ensure no abuses of human rights.
(For link to Insider interview, see http://reut.rs/1gerxra)
Malaysia, which announced $504 million of deals with British, Swiss and Singaporean companies over the past week, has also emerged as one of the leading players in the growing Islamic finance market.
Najib said the country wanted to work not only with Middle East financial centers, such as Dubai and Bahrain, but also with the likes of London, which announced plans on Tuesday to become the first Western country to issue a sovereign sukuk, or Islamic bond.
"In a way we compete (with London) but if we can increase the share of Islamic finance in terms of the total issuance of bonds for example, then our share and the City of London's share will also increase correspondingly," he said.
(Reporting by Brenda Goh and Shadi Bushra; Editing by Andrew Heavens)