The dominant party has formally backed a call from its leader, Prime Minister Dr Mahathir Mohamad, for religious moderation and supported his handling of the recent financial crisis. Delegates at the United Malays National Organisation's (UMNO) annual conference said Dr Mahathir probably would not suffer after yielding to foreign pressure for spending cutbacks and for his U-turn on share-transaction policy. But they saw increasing opposition to his attempts to ensure Malaysia remained a moderate Islamic state. Several delegates were positive about the Prime Minister's handling of turmoil in the stock and money markets. Party sources pointed out he had associated Deputy Prime Minister and Finance Minister Anwar Ibrahim with his actions. Dr Mahathir even asked Mr Anwar during a televised press conference to explain the Government's approach. This effectively forestalled Anwar supporters seeking to capitalise on Dr Mahathir's policy retreat in a bid to hasten his departure from office. But if there was a degree of UMNO unanimity on the financial issue, there was none on the role of Islam. Although the general assembly resolved to 'defend the moderate approach' on Islamic matters and reject extremism, the motion merely papered over a deep divide within the party, which was widened by Dr Mahathir's opening address. Mr Mahathir said yesterday he would stop bookshop sales of an Islamic newsletter which questioned his standing as a good Muslim. He said Harakah (Islamic Movement) could be distributed to members of the opposition but not to the general public.