Many thousands of people from South Asia work in Malaysia

Officials earlier confirmed they had stopped granting visas to Indian workers, in a move said to be linked to rallies by Malaysian Indians last year.

But Works Minister S Samy Vellu cast doubt on that assertion, saying his government had made no such order.

If the prohibition is put in place it will affect about 140,000 Indians currently working legally in Malaysia.

Speaking at a conference in the Indian city of Delhi, Mr Vellu, the only ethnic Indian member of the cabinet, initially said Malaysia had enough workers and did not want any more.

But he later appeared to take a different stance and denied the reports.

"There is no such thing as banning workers from India and Bangladesh," he told the BBC.

"I have talked to the minister of human resources. We have never made such a decision."

'Hindraf link'

News of the apparent ban emerged after leaders of Malaysia's ethnic Indian community complained that Hindu priests and musicians had been denied visas.

Authorities had already stopped issuing work visas for Bangladeshi migrant workers, arguing that labour agents were bringing in more workers than there were jobs.

The government said that the move to stop issuing visas to Indians was taken three weeks ago.

An official from the Ministry of Home Affairs told the BBC that the decision "may be linked to Hindraf", the Hindu activists group which organised recent rallies by Malaysian ethnic Indians.

Thousands of ethnic Indians took to the streets late last year in protest against perceived social and economic discrimination by the Malay-Muslim majority.

Significant move

The announcement of a ban being put in place came on the final day of a visit to Malaysia by Indian Defence Minister AK Antony and took many people by surprise.

A Vaithilingam, president of a Malaysian inter-faith group, said that the decision came without dialogue and was "unprecedented".

The BBC's correspondent in Kuala Lumpur, Robin Brant, said such a ban would be a significant diplomatic move by the Malaysia government.

An Indian worker told Reuters that the Malaysian government should not have taken such a drastic step.

"They should recognise the contribution made by Indian workers and professionals in the economic growth of the country," he said.

Our correspondent says tensions are high with a general election expected to take place early this year.