Home Ministry deputy secretary-general (security) Abdul Rahim Mohamad Radzi said the unit would involve the police, Internet regulators, the information ministry and the attorney-general's chambers.

"It is a mechanism that will coordinate these various agencies to help monitor what is being said in cyberspace and to take action against those that are trying to stoke racial tensions and disunity," he said.

Abdul Rahim said the group would also monitor alternative and mainstream media for similar content.

"There is a disturbing trend now appearing on the Internet where some people are inciting racial unrest and causing confusion and this will damage the peace we have in the country," he added.

Abdul Rahim cited the recent case of a Facebook page that insulted Muslim Malays. They make up the majority of Malaysia's multicultural population, alongside large ethnic Chinese and Indian communities.

Police are also investigating ethnic Chinese rapper Wee Meng Chee for sedition, after he posted a three-minute rap on YouTube criticising a Malay headmistress accused of making racial slurs against minority students.

The government has ordered a probe into the case which caused anger among Malaysia's minorities, who complain their rights are being eroded as the country becomes increasingly "Islamised".

In another case, Malaysian journalist Irwan Abdul Rahman was charged this week over a satirical blog which made fun of the state power firm Tenaga, and faces a year's jail if convicted.

The prosecution caused a stir because unlike the mainstream press, the web and online media in Malaysia have remained relatively free, despite occasional raids, bans and government criticism.

Major newspapers and broadcasters are closely linked with the ruling coalition, so the Internet has become a lively forum for dissent and debate.

The government in 1996 pledged not to censor online content as part of a campaign to promote its information technology sector.