Malaysia's political landscape has been shaped in part for nearly two decades by a feud between Mahathir Mohamad and Anwar, but in a striking turn of events the two leaders have joined forces.
Malaysia's newly-elected Prime Minister Mahathir Mohamad said on Friday that the country's monarch has indicated he was willing to grant a full pardon to jailed politician Anwar Ibrahim immediately.
The southeast Asian nation's political landscape has been shaped for nearly two decades by a feud between Anwar and Mahathir, whose decision to sack Anwar as his deputy sparked an opposition movement, Reformasi, or Reform, in 1998.
But in 2016, Mahathir abandoned the long-ruling Barisan Nasional (BN) coalition, and joined Anwar's opposition alliance to fight against scandal-hit and now ex-premier Najib Razak.
"It is going to be a full pardon, which means not only pardoned, but he is released immediately and after that he will be free to participate fully in politics," Mahathir told reporters a day after he was sworn to office following his alliance's shock win in Wednesday's election.
At 92, Mahathir is the world's oldest elected leader.
The veteran politician said the king indicated he was willing to pardon Anwar immediately. A full pardon by the king would mean Anwar can return to active politics.
Before the election, Mahathir had said he would step down and give the prime minister's post to Anwar when he is pardoned. He has said Anwar's wife Wan Azizah Wan Ismail will be the deputy prime minister in his cabinet.
Reporters and Anwar supporters were gathering on Friday outside a hospital in Kuala Lumpur where he is recovering from a shoulder surgery. His wife also arrived at the hospital and an alliance source said Mahathir was due to visit later in the day.
Anwar, 70, was previously due to be released on June 8 with time taken off his sentence for good behaviour. He began a five-year sentence for sodomy in 2015, a charge he and his supporters say was politically motivated.
His daughter spoke to TRT World
Mahathir said he will announce a cabinet on Saturday that would include himself, Wan Azizah and 10 others, including the ministers for finance, foreign affairs, defence and home affairs.
"Whether Anwar will be part of the cabinet or not will be decided when the time comes," he said.
Mahathir said initial policies would focus on fulfilling promises made in alliance's manifesto, including the abolition of a goods and services tax (GST).
"In the case of foreign affairs, we want to maintain good relations with all countries regardless of their policies," he said. "We do not want to favour any country, we want to ensure that the market for Malaysia is as large as possible."
Mahathir has vowed to reassure financial markets and return billions of dollars lost in a graft scandal at state fund 1Malaysia Development Berhad (1MDB), which was a major factor in the election and in the ouster of Najib, Mahathir's predecessor and former protege.
The new prime minister said the country's attorney general was wrong to clear Najib in the 1MDB probe in 2016.
"He, in fact, has hidden evidence of wrongdoing, and that is wrong in law. We have to do what is permitted by the laws of this country," Mahathir said.
Malaysian markets were closed on Friday and will reopen on Monday, but overseas investors were nervous about Najib's ouster after a decade in office.
Mahathir said his government would look into measures to stabilise the ringgit, and talk to departments on what could be done.
Mahathir, dubbed the "Father of Modern Malaysia" during his previous 22 years in power until 2003 was known for his strong-arm, sometimes pugnacious style of rule, marked by an intolerance for dissent.
But he was also credited for transforming his southeast Asian country from a sleepy backwater into a modern industrialised nation.