In a statement on Monday, Jakim said films that portrayed 'horror, myth, superstition and false traditional elements' would be banned, but did not state when it wanted such a ban to take effect.

Jakim authorities argue that they have the right to regulate moviemaking under the auspices of Islamic law. However, it is the Film Censorship Board that oversees movie production and film content and has the final say.

Film producers say they will suffer huge financial losses if the new rules are enforced.

'They must at least give us a five-year notice before enforcing the new rules because dozens of films under various stages of production would be adversely affected,' said a prominent film producer who requested anonymity.

'We are asking for a meeting with Prime Minister Najib Razak to resolve the matter,' he said adding film producers were 'very upset' because they were frequently blamed for 'corrupting morals' and targeted by Islamic authorities.

Shuhaimi Baba, a prominent maker of supernatural-themed films, said the new rules would kill the small Malaysian film industry.

'The local film industry is heavily regulated and we have been following the rules carefully,' said Shuhaimi, director of popular horror movies including Pontianak Harum Sundal Malam (Red Eyed Ghost) and Waris Jari Hantu (Ghostly Finger).

'Millions of dollars in investment is at stake here if the new rules are enforced,' Shuhaimi, who was picked best director in 2007, said.

The threat of a new raft of regulations first emerged in June when Musa Hassan, chief of the national police, wrote letters to the censorship board and the Ministry for Information, Communication and Culture requesting that local films stop depicting the mat rempit racers who dominate Kuala Lumpur's roads after midnight.

'Each time a film depicting them is released the problem worsens with more youths taking to the streets,' Mr Musa said, adding that mat rempit gangs were no longer simply involved in traffic offences, but had been linked to more serious crime.

On average, about 30 local films are made each year. Some are teary love stories, but the occult and exploits of mat rempit have emerged as popular themes.

Malaysian Film Producers Association president Ahmad Onah defended local films, saying the contents were responsible and never 'very offensive'. 'We know the environment we work in,' he told The Star daily.

He said censors should apply a PG13 or adults-only rating instead of cutting scenes.

Jakim has long opposed the occult in Malay-language films, describing it as a Hindu influence and entirely against the teachings of Islam.

The powerful body is also strongly against cross-dressing - called mak nyah - and its depiction in films. However, the theme is a popular one in local movies.

Mak nyah was accepted as normal in some sectors of Malay culture but was strongly opposed by conservative Muslim officials, Malay culture expert Eddin Khoo said.

'Malays have a strong fascination for the occult and ghostly themes too and they recur frequently in films and other artistic medium,' Mr Khoo said. '[But most Malay] films are all right because they have a positive social message at the end.'

Jakim has said it wants the new rules to be enforced on new films but has been silent on films awaiting release and those in production.