Dr Mahathir Mohamad has demanded that Tabung Haji cancels it land purchase from 1Malaysia Development Bhd (1MDB) which he described as a "bailout".

"Is this how Tabung Haji uses public money entrusted to it?

"Contributors hope for their money with Tabung Haji will be managed for their good, but the money is being used to rescue 1MDB, which has lost billions of ringgit.

"This plan must be called off immediately," the former prime minister in in his blog posting today.

Mahathir's remarks puts Housing and Local Government Minister Abdul Rahman Dahlan ( right ) in an awkward position after he called PKR vice-president Rafizi Ramli a "clown" for saying the same thing.

"Don't be a political clown. Don't pretend that you don't know the difference between an investment and a bailout," Rahman had said in a Twitter posting today.

Mahathir pointed out the price Tabung Haji was paying for a small fraction of 1MDB's 70-acre Tun Razak Exchange land is almost equivalent to cost of the entire area first paid for by 1MDB.

"The Tun Razak Exchange with an area of 70 acres was bought by 1MDB at the price of RM194.1 million.

"Now, Tabung Haji is buying 1.56 acre for RM188.5 million, almost the same price as 1MDB bought the whole 70 acres. It's a big profit for 1MDB," he said.

Mahathir added that the area was initially meant for a bumiputera trade centre, but the plan was scrapped by 1MDB.

He said the money used is not owned by Tabung Haji, which is expected to manage it well and according to Islamic principles.

"It is very sad when the money is used to bailout 1MDB," Mahathir said.