(AFP) - Prime Minister Mahathir Mohamad today denied Malaysia's powerful finance minister Daim Zainuddin was resigning, saying he was just taking two months' leave.

"He is not leaving in the first place. Just going on leave," Mahathir told reporters when asked about any resignation plans by Daim.

"He's only not attending cabinet meetings and UMNO (ruling party) supreme council meetings."

Asked if he has a replacement in mind should Daim resign, Mahathir said: "We will cross that bridge when we come to it.

"At the moment we have no plans to appoint a new minister of finance because we've not reached that stage."

Daim is 'tired'

Mahathir, who had earlier declined comment on a possible resignation, said he thought Daim was "tired".

Speculation about a resignation helped erode stock market gains.