Malaysia's Attorney-General Mohamed Apandi cleared Najib of wrongdoing
Malaysia's Prime Minister Najib Razak (L), with his bodyguards, leaves parliament in Kuala Lumpur, Malaysia, January 26, 2016. Malaysia's attorney-general said on Tuesday that $681 million transferred into Prime Minister Najib Razak's personal bank account was a gift from the royal family in Saudi Arabia and there were no criminal offences or corruption involved Reuters

Amid deepening mystery over the controversial funds received by Malaysian Prime Minister Najib Razak, the latest revelation claims Saudi Arabian rulers funded his election campaign to keep a hardline political party in Malaysia away from power.

On Tuesday, Malaysia's Attorney-General Mohamed Apandi cleared Najib of wrongdoing, saying $681m deposited in the prime minister's bank account was entirely legal "personal donation" from the Saudi royal family.

However, the move only made the issue more vexatious, with the opposition claiming such things happen only in fairy tales.

Saudi Arabia funded Najib in order to curb the influence of the main political opposition power Pan-Malaysian Islamic Party (PAS), whose founders were influenced by the Muslim Brotherhood, BBC has reported, citing a reliable Saudi source.

The Saudi royals paid the money to Najib in several tranches in March and April 2013 and that people at the very top had approved the money transfer, the source said.

The insider told BBC there was nothing peculiar about this funding as Saudi Arabia routinely doles out funs to friendly regimes in the region and the wider Muslim world in order to entrench its influence.

"There is nothing unusual about this donation to Malaysia ... It is very similar to how the Saudis operate in a number of countries."

Saudis used the funds to "help Najib and his coalition win the election, employing a strategic communications team with international experience, focusing on the province of Sarawak, and funding social programmes through party campaigning," the report said.

The attorney general said Najib had returned US$620 million to Saudi's royal family from his personal bank account in 2013.

Meanwhile, Sydney Morning Herald said Saudi Arabia will investigate Malaysian Attorney-General's claim that Najib had returned US$620 million to the Saudis.

Malaysian opposition leaders too have dismissed the claims. Leading opposition figure Rafizi Ramli said Apandi's claim only made the situation "more ridiculous" and the prime minister had become a "clown".

They also ask what happened to US$61 million that, according to the attorney general, was not given back to the Saudis.

Anti-graft panel may appeal

Meanwhile, the Star reported that Malaysia's Anti-Corruption Commission (MACC) may appeal against the Attorney-General's decision to clear Najib of wrongdoing.

It was "most likely" that the Commission would appeal decision in the straightforward case," MACC special operations director Datuk Bahri Mohd Zin said, according to the paper.

National Human Rights Society president Ambiga Sreenevasan has said many questions were left unanswered in the attorney general's statement.

"So far as I can see, the explanation given is not enough because at the end any explanation must make sense and this doesn't make sense," she said.