By Joseph Sipalan and Praveen Menon
KUALA LUMPUR (Reuters) - Malaysia's opposition expects to hammer out a new alliance by the end of the year as more members of scandal-tainted Prime Minister Najib Razak's ruling party jump ship, a sacked deputy prime minister said on Tuesday.
The pact will aim to unseat Najib, who remains firmly in power despite intense pressure to step down over the multi-billion-dollar scandal, and remove the ruling coalition, led by his United Malays National Organization (UMNO).
"The party faces declining support and many are not even sure whether UMNO can survive the next elections," the former minister, Muhyiddin Yassin, who is widely seen as the opposition's prime minister-in-waiting, told Reuters.
The general election is due by the end of 2018, and Najib, speaking during a visit to Berlin, the German capital, ruled out bringing it forward.
Muhyiddin did not identify any potential UMNO rebels in his first interview since his new party, Parti Pribumi Bersatu Malaysia (PPBM), was registered two weeks ago.
Many UMNO leaders keen to join PPBM are uncomfortable with the problems the ruling party faces over Najib's "tainted image", Muhyiddin said. Najib has denied any wrongdoing.
A Malaysian government spokesman dismissed Muhyiddin's statement as a ploy to revive his career.
"Muhyiddin has been claiming for over a year that UMNO’s leaders, and indeed the Malaysian public, are about to desert the party," the spokesman told Reuters.
"This has proven to be wishful thinking, with Barisan Nasional winning all three recent elections with landslides, and the party more united than ever."
The new party is chaired by former prime minister Mahathir Mohamad. His son, Mukhriz Mahathir, former chief minister of the Malaysian state of Kedah, is also a member.
Opposition leaders realize they need to work together to avoid multi-cornered contests that could split the vote base at the general election, Muhyiddin said.
"I would like to see this pact happen as soon as possible, before the year's end," he added.
PRESSURE MOUNTS ON PM
Muhyiddin was sacked from the cabinet last year, and later from UMNO, for questioning Najib's handling of the scandal at state fund 1Malaysia Development Berhad (1MDB).
Pressure has mounted on Najib after the U.S. Justice Department filed lawsuits seeking to seize more than $1 billion of assets allegedly siphoned off from 1MDB.
The lawsuits do not name Najib but say more than $700 million of misappropriated funds flowed into the accounts of "Malaysian Official 1", whom U.S. and Malaysian officials have identified as Najib.
Since his expulsion from UMNO, Muhyiddin has become a bridge to mend an opposition fractured by the breakdown of the nascent Pakatan Rakyat coalition last year.
Mahathir this month met and shook hands with jailed de facto opposition leader Anwar Ibrahim, a gesture that opened the way for a coalition between the Anwar-led opposition alliance and the PPBM.
Anwar, a rising political star in the late 1990s before falling out with then prime minister Mahathir, spent several years in prison on sodomy and graft charges he and his supporters call politically motivated.
He was jailed for five years in 2013 on a sodomy charge he said was fabricated to keep him from contesting the 2018 election. The government has rejected any suggestion of interference in the case.
(Editing by Clarence Fernandez)