Speaking at an Umno Youth function in Pahang, he said withdrawing from the contest would give the impression that BN is weak, and this would disappoint the party's supporters.

Tun Dr Mahathir felt the coalition should not surrender although the seat is held by the opposition.

'If Penanti was in an Umno area, I am sure that we will contest. However, since it is in an opposition area, we do not want to contest,' he said. 'But if we wait to contest only in Umno areas, then there would not be any Umno areas and we would not have to contest anywhere.'

Penanti is the former seat of opposition assemblyman Fairus Khairuddin. Currently under investigation for corruption, he quit his seat last week, forcing a by-election within 60 days.

Prime Minister Najib Razak had floated the idea of skipping the polls last Saturday - a possible first for the BN - citing another by-election as a 'sheer waste of public funds'.

The Election Commission had earlier revealed that the last five by-elections had cost the government a whopping RM33.4 million (S$13.3 million).

But Dr Mahathir pointed out on Sunday that during his time as premier, Umno had never withdrawn from any electoral contest, even if it was held in the opposition stronghold of Kelantan.

'Winning or losing is a separate matter; however, if we do not contest then the other party has already won,' he said.

'History has proven that Umno can face giant powers, including the British administration in our struggle for independence.

Read the full story in Monday's edition of The Straits Times.