At ruling party anniversary, Malaysia's Najib hints at early polls

KUALA LUMPUR (Reuters) - Malaysia's Prime Minister Najib Razak on Thursday asked members of the ruling party and his supporters to be prepared for polls, in one of the strongest signs yet from the leader that he may call early elections. Najib, whose tenure ends by the second half of next year, is seeking a fresh mandate to rule as he faces down a multi-billion dollar financial scandal and an internal revolt led by his former mentor. "I want to ask you all, are we strong enough? Are we ready? Can we dissolve Parliament tomorrow?" he said to cheers from a capacity crowd at the 87,000-seater stadium in Kuala Lumpur, where his party, the United Malay National Organisation (UMNO), celebrated its 71st anniversary. "That is the spirit that we want," he said. Tens of thousands of party members clad in red, the party colour, filled the stadium grandstand, cheering and singing along to party songs for several hours as they waited for Najib to turn up to deliver his keynote address. Thursday's anniversary celebration is arguably one of the largest since Najib took over as prime minister in 2009. "All of you are have gathered here, as a symbol that our party is the strongest party on Malaysian soil," Najib said. The next election is not due until 2018 but, after dodging a corruption scandal at state fund 1Malaysia Development Berhad (1MDB), Najib is expected to capitalise on opposition disarray and call one this year. Government sources have told Reuters that Najib may call polls in the third quarter. Although Najib is widely expected to win, he has little room for manoeuvre. The UMNO-led Barisan Nasional (BN) won narrowly in the 2013 elections and if his majority was further eroded, Najib could face an internal leadership challenge. Najib faced the biggest test of his leadership in 2015 after allegations that hundreds of millions of dollars were misappropriated from 1MDB. But he purged dissenters and cracked down on civil rights and the media, thereby consolidating power. His former mentor turned critic Mahathir Mohamad is now leading an opposition party campaign to oust him. Najib suffered a setback last week when a deal that was expected to ease the debt burden of 1MDB fell through, complicating Najib's efforts to move on from a financial scandal. (Reporting by Joseph Sipalan; writing by Praveen Menon,; Editing by Ed Osmond)