Singapore's Prime Minister Lee Hsien Loong, visiting Malaysia as part of a swing through Southeast Asian neighbours after taking over in August, and his Malaysian counterpart Abdullah Ahmad Badawi agreed on the new role for Goh, who is known for a genial, consensus-driven style.

Lee and Abdullah made the announcement after meeting in Malaysia's administrative centre Putrajaya. They agreed to take further steps to promote cooperation, including joint business activities in emerging markets like China, Indonesia, India and Bangladesh.

The two leaders also witnessed the signing of a new agreement on the avoidance of double taxation to promote trade, investment, financial activities and the movement of technical experts across their borders.

They are both among each other's top trade and investment partners. Bilateral trade in 2003 totalled US$46 billion, according to Singapore figures.

"We regard this as an important event in our bilateral relations," Abdullah, 64, told journalists in a joint appearance with Lee after their meeting.

"We must continue to seek new areas of cooperation and this would be in the interest of Malaysia and Singapore. We can have joint ventures in third countries or undertake projects together," Abdullah said.

Lee, 52, said "the tone of relations has improved in the last 12-18 months," adding that "we need to build on this and develop more momentum of cooperation between our two countries.

"We can cooperate in tourism. Our private sector can work together. We can cooperate in security matters, anti-terrorism and security in the Malacca Strait," he said.

Lee also cited joint efforts to combat the Severe Acute Respiratory Syndrome (SARS) epidemic last year and the current bird flu problem in Southeast Asia.

Goh, 63, stepped down as prime minister in August after 14 years in power in favour of his deputy Lee, son of Singapore's founding father Lee Kuan Yew, 81. The elder Lee led the city-state out of the Malaysian federation in 1965 amid a dispute over racial policies.

Ties have often been stormy since the separation but improved quickly after Abdullah took over from Malaysia's feisty veteran leader Mahathir Mohamad, 78, in October last year.

Aides told AFP that Goh and Abdullah have warm personal relations.

Goh took the title Senior Minister -- number two in Singapore's political hierarchy -- after stepping down and is also chairman of the central bank.

"We have already invited Senior Minister Goh to visit Malaysia. I believe he will be able to make at least one visit by end of the year," Abdullah told journalists.

Lee said he told Abdullah that "although I have taken over as prime minister, I have asked Mr. Goh Chok Tong to look after the bilateral issues because he is familiar with them," adding that the issues were 'complex" with "many ins and outs."

Disputes persist over the price of long-term water supplies to Singapore, Singapore's military access to Malaysian airspace, the future of Malaysian-owned railway land inside Singapore, and a proposed new bridge linking the two nations.

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