"Singapore is still ready to resolve the matter in accordance with the terms of the Water Agreements," said the advertisement by the ministry of information, communication and the arts in the regional business daily.

Singapore's advertisement followed an eight-day media campaign by Malaysia in which Kuala Lumpur took out ads in the Asian Wall Street Journal as well as Malaysian newspapers.

The Malaysian ads claimed Singapore made a profit of 174.34 million US dollars from Malaysian-supplied raw water in 2001, while Kuala Lumpur was paid just $629,000 under the deal.

The Malaysian government also published a booklet justifying its move to ask for an increase in the price of its water sold to Singapore.

Malaysia, which supplies half of Singapore's daily water needs, has sought a price increase from the current three Malaysian sen (less than one cent) per 1000 gallons (4550 litres) under agreements entered into in 1961 and 1962.

Singapore claims Malaysia lost the right to review the water price after it failed to do so in 1986-87 under the terms of their agreements.

The city-state said it agreed to discuss the water issue but only as part of a package deal that would include other outstanding issues between the neighbours, which separated in 1965 when Singapore was ejected from the Malaysian federation.

Malaysia agreed but later said it wanted to discuss the price of water independently.

"Always central to the discussion is not how much Singapore pays but how any price revision is decided upon," Singapore said in its advertisement.

"International law and the sanctity of treaties voluntarily entered into by governments are the foundation of inter-state relations. Our very existence -- and the existence of countries in similar situations -- depends on such agreements being honoured," it said.

Singapore said it has offered to increase the price of water to 60 sen per 1000 gallons from the current three sen as part of a package deal.

"Malaysia agreed then changed its mind," it said, adding that Kuala Lumpur asked for three Malaysian ringgit and later six ringgit.

Malaysia unilaterally broke of negotiations in October 2002.

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