Malaysia's opposition leader Anwar Ibrahim speaks at a rally on the eve of the verdict in his final appeal against a conviction for sodomy in Kuala Lumpur
By Trinna Leong and Al-Zaquan Amer Hamzah
KUALA LUMPUR (Reuters) - Malaysia's highest court rejected on Tuesday an appeal by opposition leader Anwar Ibrahim against a sodomy conviction, sending the politician who poses the greatest threat to the long-ruling coalition back to prison for five years.
The U.N. Human Rights office, the United States and Australia said they were disappointed by the ruling and Amnesty International said it would have a chilling effect on freedom of expression.
Anwar, the ruling party's rising star in the mid-1990s before he fell out with then Prime Minister Mahathir Mohamad, denied the charge that led to his second conviction for sodomy as a fabrication aimed at ending his political career.
"I will walk again for the third time into prison but rest assured that I will walk in with my head held high," a defiant Anwar said in a statement he read out in court.
"I maintain my innocence."
Prime Minister Najib Razak's government has rejected any suggestion of interference in the case.
"Malaysia has an independent judiciary, and there have been many rulings against senior government figures," it said after the ruling.
The United States said it was "deeply disappointed" with the conviction. "The decision to prosecute Mr. Anwar and the conduct of his trial have raised a number of serious concerns about rule of law and the fairness of the judicial system in Malaysia," National Security Council spokeswoman Bernadette Meehan said.
Anwar criticised the court saying that in rejecting his appeal it was "bowing to the dictates of the political masters".
"You chose to remain on the dark side and drown your morals and your scruples in a sea of falsehood and subterfuge," he told the judges who walked out of the court as he spoke.
"I will not surrender," he said.
Anwar later comforted his wife and children and had a meal with them before being taken to the Sungai Buloh prison, about 30 km (20 miles) from Kuala Lumpur.
A court found the 67-year-old former deputy prime minister guilty in March last year of sodomising a former political aide.
The conviction disqualifies him from political office and contesting the next election that must be held by 2018.
Nurul Izzah, Anwar's daughter who is also a political leader in his Parti Keadilan Rakyat, was also defiant.
"This is not the end," said told reporters outside the court.
Anwar is head of a three-party opposition alliance that made stunning gains in a 2013 general election which for the first time raised the possibility of a genuine challenge for the coalition that has ruled Malaysia since independence in 1957.
WORRY FOR INVESTORS
The decision against him raises the prospect of a fresh bout of political agitation which could make investors even more cautious about putting money into an economy heavily dependent on oil and gas revenues at a time when global prices are low.
Australia said it was "deeply concerned" about Anwar's sentence, while the U.N. Human rights office said sodomy should not be a criminal offence.
In spite of strong words, the practical reaction from foreign governments appeared muted.
A spokeswoman for the U.S. State Department said the United States was "not engaging in quid-pro-quo actions" when asked if there would be consequences for what Washington has said appeared to be a politically motivated prosecution.
"Our view is the most important consequence of this verdict will be how it affects prospects of Malaysia's own future success," Jen Psaki told a regular news briefing.
Washington is keen to maintain solid ties with Malaysia, not least given its current role as chair of the 10-nation Association of Southeast Asian Nations and as a member of the U.N. Security Council.
John Sifton, Asia advocacy director of Human Rights Watch said the United States should respond with more than just words.
"The White House has a number of options on the table – from pulling out of various joint diplomatic functions to threatening to not hold a bilateral with Najib during ASEAN. The U.S. should make today’s decision have actual consequences."
Psaki said she was not aware of any plan to change U.S. participation in the East Asia Summit Malaysia is due to host in November and which President Barack Obama is expected to attend.
Underlining the importance of the relationship, Psaki said retired U.S. Marine General John Allen, Obama's envoy for the U.S.-led coalition battling Islamic State, was in Malaysia on Tuesday for meetings with the defence minister and the deputy foreign minister.
Anwar's jailing could undermine the opposition's unity and the challenge it poses but it could also galvanize dissent.
His party and the opposition alliance plan protests. Hundreds of supporters outside the court waved party flags and shouted "Down with Barisan Nasional", referring to the ruling coalition.
Anwar's political career has been turbulent since he was sacked in 1998 after falling out with then premier Mahathir - who remains hugely influential - and then campaigned against corruption and nepotism and led a nationwide "reformasi" (reform) protest movement.
He has spent several years in prison after being accused himself of corruption and an earlier sodomy charge.
Some ruling party members and analysts have played down fear of upheaval in response to Anwar's return to jail.
"Anwar's political image is not anywhere near close to what it was in the '90s," Wan Saiful Wan Jan, of the Institute for Democracy and Economic Affairs, said earlier.
"The country has moved on."
(Additional reporting by Doina Chiacu, Arshad Mohammed and David Brunnstrom in Washington; Writing by Praveen Monon; Editing by Robert Birsel and Marguerita Choy)