An estimated 1.2 million illegal immigrants would be allowed to return to their home countries during a two-week amnesty period starting from October 29, Home Minister Azmi Khalid said.

"We are not going to penalise them. Many of them are lying low for fear of getting caught by the authorities. This time, we will allow them to walk away scot-free," Azmi told AFP.

However, a large-scale deportation exercise would begin in January, he warned.

Prime Minister Abdullah Ahmad Badawi said thousands of illegal Indonesian workers would be allowed to return home to celebrate Islam's biggest festival of Eid-ul-Fitr.

"We have decided to pardon them and those who surrender will not be fined. They need only to go through due process arranged by their government," Abdullah was quoted as saying by the New Straits Times on Thursday.

He was speaking in Jakarta where he attended the swearing-in ceremony of Indonesia's new President Susilo Bambang Yudhoyono on Wednesday.

Under tough laws introduced two years ago, illegal immigrants face jail sentences of up to five years or fines of up to 10,000 ringgit (2,632 dollars), or both, plus whipping.

Eighteen thousand illegal immigrants have been whipped in Malaysian prisons in the past two years.

A total of 6,000 illegal immigrants currently being held at detention centres nationwide would be allowed to return to their countries, provided they possess valid travel documents and are not witnesses in court cases, Azmi said.

Most of the country's illegal immigrants are from neighbouring Indonesia and the Philippines, drawn to relatively prosperous Malaysia by jobs in construction, plantation work and services.