Every year, some US$3 trillion worth of goods pass through the disputed waterway, rich in fisheries and potential oil and gas reserves.

Malaysia occupies at least five features in the disputed Spratly Islands, including the oceanic atoll known as Swallow Reef, where it has a small naval presence.

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These islands are well within the U-shaped “nine-dash line” that marks China’s claims in the sea.

Observers say the waters have become a flashpoint because of heavy militarisation there by China and other claimant states, while the US sends warships to the area as part of “freedom of navigation” exercises.

Mahathir said that the presence of warships posed the biggest threat to peace in the waters.

Pressed on whether his government’s position on the South China Sea would differ from Najib’s softer tone, Mahathir said he just wanted Malaysia to continue occupying the disputed islands that it currently holds.

“There are certain rocks which we have developed into islands. And we hope that we will stay on those islands, because it is a part of our keeping the sea safe from pirates and others,” said Mahathir, who is serving as prime minister for the second time after his 1981-2003 turn at power.

“So we want to retain, of course, about four or five islands that we have occupied. The rest – whoever thinks it is theirs, they can occupy,” Mahathir said.

He added: “But it is something if China claims the South China Sea is theirs, but those islands have always been regarded as ours for a long time. So we want to retain them.”

Mahathir said that one way to keep the peace in the South China Sea was for the waters to be “patrolled by small boats” that would be “equipped to deal with pirates, not to fight another war”.

“But if China wants to participate with small boats, they are welcome. Anybody, even the US if they want to participate – but don’t bring battleships here,” Mahathir said.

Asked if he was confident China would keep the waters open – Western powers say that Beijing’s island-building activity in the South China Sea may impede freedom of navigation – Mahathir said it was “to the benefit of China to have the seas open”.

“Because then, you will have more trade,” the premier said.

“You can’t expect all the goods going to China to change into Chinese ships before entering the Strait of Malacca and South China Sea.

“Goods from Europe and America, they will pass through the Strait of Malacca, and they should be free to pass through the Strait of Malacca, and then go to the South China Sea to reach China.

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“You can’t expect an oil tanker belonging to the Americans to stop and pump the oil out into Chinese ships, I mean, that is ridiculous. The sea must always be open.”

He cited the narrow Strait of Malacca between Malaysia and Indonesia as an example of a free waterway.

“We have never tried to stop ships from passing through. They are welcomed. Although between Malaysia and Indonesia, we could have named this Strait of Malacca the ‘Malaysia-Indonesia Sea’, we didn’t,” Mahathir said.

“We want it to be open because it’s good for trade. The South China Sea also is good for trading nations.”

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Ian Storey, a veteran researcher on the South China Sea dispute, said that Mahathir’s comments “underscore his determination to uphold Malaysia’s territorial and jurisdictional claims in the South China Sea”.

“His views do not represent a change in Malaysia’s policy, but I think we can expect Mahathir to be more critical of China’s assertive behaviour in the South China Sea than his predecessor, who was in hock to Beijing,” said Storey, of Singapore’s ISEAS-Yusof Ishak Institute.

Storey said Mahathir might use his role as an “elder statesman” in the Asean bloc to encourage greater unity over the South China Sea, and to expedite talks with China for a code of conduct in the waters.