Umno leaders will likely have to choose sides soon in an escalation of the power struggle which has gripped the party for nearly a year.
Prime Minister Najib Razak has come out fighting against a bruising allegation of embezzling US$700 million (S$940 million) and accused former premier Mahathir Mohamad of masterminding the latest attack against him.
Datuk Seri Najib's deputy Muhyiddin Yassin has called for a wide-ranging investigation into the claims - which include at least RM42 million (S$14.9 million) of public funds - and a series of police reports have been filed by people across the political divide,
Tan Sri Muhyiddin's call for the authorities to "immediately investigate all allegations against Datuk Seri Najib" also included a public admission that there are concerns over "the integrity and credibility" of Malaysia's prime minister as the head of government.
Umno has governed Malaysia for nearly six decades since independence, but after failing to gain the popular majority vote in the 2013 General Election, analysts believe the party must quickly decide whether to stick with Mr Najib or to turn away from him in order to avoid a tougher battle at the next general election in 2018.
STANDING BY REPORT
We are very careful and we believe the investigation and documents we have are very... solid and come from a very reliable investigation and not a political investigation. It's a significant story and we take it very seriously.
MR KEN BROWN, Wall Street Journal Hong Kong bureau chief
Tun Faisal Ismail Aziz, an adviser to the government's propaganda unit Jasa, told The Sunday Times that Umno leaders would have started taking sides, given how "desperate" Tun Dr Mahathir has become to "get rid of Najib".
Other Umno insiders say Mr Muhyiddin's statement yesterday indicated he may be veering away from staunchly supporting Mr Najib. More leaders might step away too if Mr Najib, who is Umno's president, is confirmed to have received millions of dollars in campaign funding in 2013, but did not disburse the funds to the party's divisional leaders.
Still, Umno's party structure and Constitution make it difficult to remove a sitting president in the middle of his term - two-thirds of the 60-strong Supreme Council, or more than half the party's 191 division chiefs, are needed to call for an emergency vote.
The Sunday Times understands that concern in Umno is growing over the fact that Mr Najib has not denied the existence of the accounts, said to be in his name, in AmBank. And he has not directly denied that millions of dollars were allegedly wired to these accounts, except to say "I have never taken funds for personal gain".
Veteran opposition leader Lim Kit Siang asked if Mr Najib was "admitting that there were such deposits, but he had never taken the funds for personal gain - whatever Najib's definition of 'personal gain'?"
Some asked why Mr Najib did not just ask the central bank governor, Ms Zeti Akhtar Aziz, or AmBank to deny the fund inflow.
As one Umno MP told The Sunday Times: "Ask Zeti to deny or AmBank to deny. Nothing!"
The Wall Street Journal (WSJ) insisted yesterday that its report was sourced from solid and reliable investigation documents "shared with the Malaysian Attorney-General and... seen by the Prime Minister".
Attorney-General Abdul Gani Patail confirmed that he had received documents relating to the WSJ allegations.
As the scandal unfolds, it leaves the Umno rank-and-file with the realisation that they can ill afford to ignore the claims against their president as this would taint the entire party.