A French arms company is at the centre of a deepening scandal involving the sale of three submarines, the murder of a beautiful Mongolian interpreter and the man most likely to become prime minister of Malaysia next month.

All three have been linked in a sensational sequence of revelations that have convinced many Malaysians the woman was killed to silence her claim for a share in the rewards of the arms transaction.

The scandal exploded last week after French newspaper Liberation alleged the submarines deal and the murder of Altantuya Shariibuu, 28, were connected.

File photo of Altantuya-Shariibuu

A glamorous and cosmopolitan woman, Altantuya grew up in St Petersburg, spoke Russian, Chinese, Korean and English, moved in elite circles and has been dubbed "a Far Eastern Mata Hari".

She became the mistress of a Malaysian political fixer and was allegedly trying to extort money from him at the time of her violent death.

Two members of an elite Malaysian police unit that protects top politicians are on trial in Kuala Lumpur, accused of shooting her in the jungle and then blowing up her body with military explosives.

Special Branch officers Azilah Hadri, 32, and Sirul Azhar Umar, 36, could go to the gallows if convicted of abducting and murdering Altantuya on October 19, 2006. A verdict is expected early next month.

Their trial is unfolding as Malaysian deputy prime minister Najib Razak stands on the verge of taking over as premier after a ruling party leadership election, due within days.

Najib was accused in parliament by a young opposition MP, Gobind Singh Deo, of involvement in the murder. Deo was suspended by the speaker for making the remark. Najib has strongly denied any involvement.

Testimony in an earlier court case has established an intimate personal and financial connection between Altantuya and a close aide to Najib, who was defence minister at the time of the submarine deal.

The aide, Abdul Razak Baginda, was acquitted by a court last November of being an accessory in the murder.

He has since been working on a doctorate at Trinity College, Oxford.

Baginda admitted Altantuya was his mistress for about a year and prosecutors said she had demanded money from him after their break-up.

Just before her death, she arrived in Kuala Lumpur, accompanied by a Mongolian shaman, who was to put a curse on Baginda if he did not pay up.

Altantuya was dragged away from outside Baginda's home by two Special Branch officers, but he was acquitted after maintaining that he had never given orders for her to be harmed.

The Liberation expose linking the murder to the shadowy world of arms contracts has embarrassed the French warship firm DCNS. Armaris, a firm now merged with DCNS, sold the three submarines to Malaysia in 2002 for euro 1 billion (RM4.3 billion).

Attention has centred on why Armaris paid Euro114 million to a Malaysian company called Perimekar in 2006.

Opposition leaders alleged in parliament that the payment was a "commission" for intermediaries and that Perimekar was secretly owned by Baginda. Najib replied that it was not a "commission" and that Perimekar was a "project services provider". Liberation alleged Altantuya learned of the payment and demanded USUS$500,000 (RM1,800 million).

DCNS has refused to comment on the case. It is already the subject of a French judicial investigation into corrupt practices. Efforts to contact Baginda, a self-styled political analyst, at his new home in Oxford were unsuccessful last week.

Najib has avoided public comment, but his wife told Agence France Presse she was shocked by attempts to link her husband to the case.