Like 3,000 other villagers, Mr Ismail is living with his wife in a rotting shanty town of zinc and plywood about 2km from the beach.

'We are waiting for the promised permanent houses but we don't know when that will happen,' he said. 'We are old and without children.'

On Penang Island, the construction of cheap flats for 600 tsunami victims has been plagued by delays amid allegations that some recipients are not tsunami victims.

Numerous organisations, newspapers and TV stations raised a total of M$78.8 million (HK$171 million) in cash from the public.

Allegations of misuse had always dogged the fund but they were confirmed by an independent report tabled in parliament last week.

The report by the Auditor General said while records showed the cash and kind had been dispensed, some victims had not received their full entitlement.

It said the repair and rebuilding of houses was shoddy and plagued by long delays and that M$9.8 million allocated for fishing nets, outboard motors and boats had been misused by officials.

About M$700,000 had been spent on caps, shirts, lapel pins and billboards to welcome visiting VIPs including Prime Minister Abdullah Badawi and his deputy, Najib Razak, to the disaster areas.

Some fishermen had received substandard fishing boats, nets and outboard engines that they later abandoned on the beaches.

The findings have severely embarrassed the government, which has ordered a fresh probe.

But opposition lawmakers who raised a ruckus in Parliament last week want a criminal investigation and prosecution of the offenders.

'There is strong evidence for a criminal investigation and proper punishment,' said Wan Azizah Ismail, president of the People's Justice Party.

'Local and foreign donors are very unhappy with the misuse,' she explained. 'The confidence in the government is at stake.'

Unlike its neighbours, Malaysia escaped the worst of the 2004 disaster, reporting just 68 deaths and 3,000 people displaced, mostly Malay Muslim fishermen living along the coast.

Malaysia is close to Aceh, the area worst hit by the tsunami, but the country experienced a low casualty rate because, experts said, most of Sumatra Island shielded the coast from the waves.

Foreign tourists at luxury resorts escaped unhurt after hotel staff used an alarm system involving red flags to get them off the beaches as the waves rolled in.

The country now has an early warning system in place.

'We need a full accounting of every single cent of the cash,' parliamentary opposition leader Lim Kit Siang said.

'The misuse is most embarrassing. We need a proper closure.'