The government has denied reporters from Malaysiakini press credentials that would allow them to cover state events, the report said.
The online newspaper is critical of the Malaysian government, and has published articles by writers and academics attacking Prime Minister Mahathir Mohamad's cabinet.
Mahathir, in a bid to attract Internet-related investment, had promised not to censor the Internet.
On Sunday, Malaysiakini strongly denied it receives funding from US-based billionaire financier, George Soros.
As reported by Newsbytes, a Far Eastern Economic Review article last week linked Soros with the Malaysian Web site--a link Malaysian Government officials have said would have serious consequences for the country's sovereignty, if true.
In an article on its Web site on Sunday, Malaysiakini says the Far Eastern Economic Review's claim that it is directly funded by Soros' foundation is not true. The online publication has demanded a retraction from the magazine.
Malaysiakini backed up its demands with a copy of a statement from the Open Society Institute--Soros' charity organization.
Addressed to Michael Vatikiotis, the managing editor of the Far Eastern Economic Review, the statement reads: "This is to inform you that the Open Society Institute has not provided any funding to Malaysiakini.com directly or indirectly."
The connection between Soros and Malaysiakini was made via the South East Asia Press Alliance (Seapa). Seapa--a regional network of journalist organizations--has provided funds to Malaysiakini.
The Open Society Institute said it had provided a grant "in the form of a stipend" to an advisor for the Committee to Protect Journalists (CPJ). The CPJ is a New York-based group that works with Seapa, a joint effort to highlight violations of press freedom in Southeast Asia.
But..."no funding whatsoever has been extended from the Open Society Institute through Seapa to Malaysiakini.com," said the Open Society Institute statement.
Play video
There are currently no comments for this post.