Malaysian Prime Minister Abdullah Ahmad Badawi and other senior defence officials have been outspoken recently in their opposition to privately armed vessels providing security for commercial ships in the pirate-infested strait.

However Najib, who is also deputy prime minister, told a regional security conference in Singapore that Malaysia would reluctantly allow them to "transit" through its waters.

"These services should be provided outside of our territorial waters, and remain consistent with international law," Najib told the Asia Security conference, attended by more than 20 Asia-Pacific defence ministers.

"(But) given the nature of the straits, it is very likely that these escort services will at some point or another enter territorial waters.

"We are obliged under the straits regime to allow them transit passage, that is passage that should be continuous and expeditious."

Najib said Malaysia was concerned about the possibility of the armed escorts services using large, "offensive" weapons.

"The role of private security companies should be controlled and regulated and they should not impinge on our national sovereignty," he said.

Malaysia's director of internal security, Othman Talib, told the Bernama news agency in late April that any ship providing private armed escort services to merchant vessels in the Malacca Strait would be detained.

The crew of such vessels could be categorised as "terrorists" or "mercenaries" and charged under the Internal Security Act, Othman said, according to Bernama.

"They have no power in this country and it is a violation of our territorial sovereignty," he said.

One of the security companies that has been operating in the Malacca Strait, Singapore-based Background Asia Risk Solutions, has insisted throughout the controversy that its operations are legal because of the "transit" clause.

Background Asia, which describes itself as "the leading provider of armed escorts in South East Asia for maritime assets", has its own armour-plated vessel that accompanies boats anywhere between Sri Lanka and the South China Sea for tens of thousands of dollars a mission.

The company employs former members of crack military units from Singapore and elsewhere who carry out their escort missions armed with M-16 and M-4 assault rifles.

There are up to six other armed escort companies already established, or in the process of setting themselves up, in Singapore, industry sources told AFP last month.

The armed escort industry is expanding amid growing concern over pirate attacks in the narrow, 960-kilometre-long (600-mile) strait.

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