The Saudi royal family was the source of a $681 million "donation" that has engulfed Malaysian Prime Minister Najib Razak in scandal, his attorney general said on Tuesday in a statement clearing the premier of graft allegations.

The Saudi royal family was the source of a $681 million "donation" that has engulfed Malaysian Prime Minister Najib Razak in scandal, his attorney general said on Tuesday in a statement clearing the premier of graft allegations.

Mohammad Apandi Ali said a review of evidence compiled by the country's anti-graft agency showed that the money was a "personal donation from the Saudi royal family".

He gave no further details on the source.

Najib, 62, has for months fended off accusations that the huge payment made into his personal bank accounts in 2013 was siphoned off from a now-struggling state-owned company that he had launched.

But until now, the origin of the money has not been specified, other than claims by Najib's government that it came from unnamed Middle Eastern donors.

The fund transfers were revealed last July just as Najib was battling allegations that hundreds of millions of dollars were missing from deals involving the state company, 1Malaysia Development Berhad (1MDB).

Najib, who chairs 1MDB's board of advisers, and the company strenuously deny wrongdoing.

But the political opposition and even critics within Najib's ruling party have demanded independent investigations, accusing the premier of sabotaging official probes.

Shortly after the fund movements were revealed, Najib provoked fierce criticism by sacking Malaysia's previous attorney general -- who was investigating the matter -- and appointing Apandi, who has ties to the ruling United Malays National Organization (UMNO).