If Anwar is convicted, in a case that opened in Kuala Lumpur's High Court on Tuesday, Malaysians can wave goodbye to the best chance of developing a two-party political system in more than half a century.

It will also end any real prospect of Malaysia extricating itself from corrosive race-based politics, and signal the former British territory's continued descent into self-destructive extremism.

Over the past two years, the charismatic Anwar, 62, has achieved what many analysts thought was impossible. He has tacked together three disparate political parties and formed a credible - if still fragile - opposition, representing hope for a multiracial future.

Nobody else has the organisational ability, political skills and personal trust to hold them together and provide the People's Front, as it calls itself, with dynamic leadership.

Anwar's legal problems should be seen in this light.

In 1998, then-prime minister Mahathir Mohamad sacked Anwar as deputy premier and finance minister because he suspected Anwar was using the turmoil of the Asian economic crisis to challenge him.

Beaten viciously in custody, Anwar spent years in jail after being found guilty of corruption and sodomy in trials regarded as fatally flawed by international legal authorities. He was cleared of sodomy on appeal, but banned from seeking public office for five years.

On his return, he galvanised the fragmented opposition into a stunning psychological victory in 2008, capturing five of Malaysia's 13 states and denying the ruling National Front coalition its customary two-thirds majority in parliament.

The opposition was able to make such gains by tapping into the "politics of disgust", winning the support of Malaysians alienated by rampant corruption and cronyism. Significant numbers of them crossed ethnic lines to vote for candidates promising reform.

Anwar targeted the affirmative action program called the New Economic Policy, which is supposed to channel economic benefits to native peoples, predominantly Malays. The policy has been widely abused to enrich better-off Malays, notably members of the ruling United Malays National Organisation (UMNO), the dominant party in the 13-member National Front.

In a bold move, Anwar formulated an alternative new economic agenda to assist all poor Malaysians, based on need rather than ethnicity. Not only did droves of disaffected Chinese and Indians desert the government, but a significant percentage of Malays also switched allegiance.

UMNO, in power since Malaysia gained independence in 1957, has reacted badly to its setback. Faced with the possibility of defeat at the next elections, due in 2013, the party has concentrated on sabotaging the resurgent opposition rather than reforming itself.

Like the rerun of a bad movie, Anwar was promptly arrested and charged again with sodomy, this time on the complaint of a university drop-out who had worked briefly for Anwar. Consensual sex between males is illegal in Malaysia, punishable by 20 years' imprisonment and caning, though the law is rarely enforced.

The public perception in Malaysia is that "sodomy 2", as the local media dub it, is entirely political, a view shared by the international community. An Amnesty International spokesman has characterised the trial as "the same old dirty tricks" to remove Anwar from politics.

UMNO has also resorted to scaremongering, using race and religion to reinforce the fear among Malays, the majority community, that they are besieged and under threat.

UMNO was blamed for fanning racial tension when arsonists last month attacked 10 churches across the country, after a court ruled that Christians could use the Arabic word "Allah" as a translation for ''God'' in the Malay language. The government insists "Allah" should be reserved solely for Muslims, despite widespread use of the word by Christians and other minorities in Arabic-speaking countries and places such as Indonesia.

Prime Minister Najib Razak, elected president of UMNO last year to replace the discredited Abdullah Badawi and stem UMNO's decline, has talked reform and even made minor adjustments to affirmative action. But while he promotes an inclusive vision for the country under the slogan of "One Malaysia", an UMNO-owned newspaper often carries racist commentaries.

Anwar and his allies in the People's Front have found the going rough in the past two years. Through a mixture of inexperience and incompetence, they have underperformed in the states they control.

Still, if Anwar is jailed for sodomy, it will not only end his political career but also terminate an attempt to open up the economic and political systems of one of the Muslim world's most important countries.

Barry Wain, writer-in-residence at the Institute of South-East Asian Studies in Singapore and author of the recently released Malaysian Maverick: Mahathir Mohamad in Turbulent Times, speaks to an Asialink public event on February 16, 6pm, Level 1, Sidney Myer Asia Centre at the University of Melbourne.