Najib risks Malaysia's reputation in his treatment of Anwar Ibrahim | Simon Tisdall

The portents do not look good for Malaysia's opposition leader, Anwar Ibrahim, whose trial on highly dubious sodomy charges draws to a close this week. If Anwar is found guilty – and the trial judge seems to have made up his mind already – he will not be the only or even the most important victim of an egregious, politically suspect injustice. Malaysia's democratic reputation will have been critically wounded, and for that outrage, Malaysians will have their prime minister, Najib Razak, to thank.

The plodding Najib's overriding objective is winning the general election expected next year, possibly within a few months. The son of Malaysia's second prime minister, the nephew of its third, president of the dominant United Malays National Organisation (Umno), and a former defence minister, Najib was born to power and is accustomed to wielding it. As the charismatic leader of the opposition coalition, Anwar represents the biggest challenge to his continuing ascendancy.

It hardly seems coincidental that the sodomy charges were levelled at Anwar shortly after the opposition inflicted unprecedented defeats on Umno and its allies in the 2008 elections. Anwar's main campaign plank – combating the official, institutionalised discrimination that favours ethnic Malays over the country's large ethnic Chinese and Indian minorities – threatened the post-colonial order that has kept Umno and its National Front coalition on top since 1957.

In a court appearance earlier this year, Anwar, 64, a married father of six, denied accusations he had had sexual relations with a former male aide. Homosexuality is punishable by law in Malaysia by caning and up to 20 years in jail. The allegations were "a vile and desperate attempt at character assassination" and a "blatant and vicious lie" spread by his political enemies, he said. "This entire process is nothing but a conspiracy by Najib Razak to send me into political oblivion by attempting once again to put me behind bars."

Najib flatly rejects the idea of a political vendetta. But the recycling of sodomy accusations – Anwar was jailed on a similar charge in 1998 and detained until the conviction was quashed in 2004 – suggests a lack of originality characteristic of the prime minister. The case turns on the testimony of the alleged victim and DNA evidence produced by the prosecution. Defence lawyers suggested this week that Anwar's accuser was a "compulsive and consummate liar" who may have been put up to it. Yet the trial judge has already declared the prosecution's evidence "reliable" and credible", leading Anwar to claim he is being denied a fair trial.

Najib gives every appearance of preparing for snap polls on the assumption that Anwar will be out of the way and the opposition decapitated. He told Umno's annual congress to prepare for battle because "the time is near" and urged delegates to work harder, for example by using social media, to attract a "new generation of Malaysians who are more critical and have rising expectations of the government". The party must adapt or face "tragedy", he warned.

To Najib's evident alarm, that tragedy almost occurred in July when tens of thousands of protesters took to the streets of Kuala Lumpur. The highly unusual public display of discontent was spurred by a range of factors: spending cuts, official corruption and cronyism, a defective electoral system, curbs on public assembly and debate, and state-imposed censorship considered draconian even by regional standards. The example of recent political upheavals in neighbouring Thailand and Singapore also played a part. In response, thousands were beaten and detained by police.

Now Najib is taking no chances as his lieutenants warn that Anwar is fomenting an Arab spring-style uprising – a so-called "hibiscus revolution". Having more or less reneged on shaky, post-July promises of civil rights reform, Najib is now pushing through remodelled restrictions in the form of the Peaceful Assembly act.

The act effectively makes peaceful assembly impossible by restricting it to undefined "designated places". No gatherings are permitted within 50 meters of prohibited places including hospitals, schools or places of worship. The police can dictate the date, time and place. Najib's idea of engaging the "new generation" of young Malaysians is to ban anyone under the age of 21 from organising a protest.

Opposition parties, lawyers and activist groups have condemned the new law, as has Amnesty International. But Khairy Jamaluddin, Umno's youth-wing leader, articulated Najib's paranoia last month when he accused Anwar's coalition of "trying hard to manufacture panic and disorder" by promoting street rallies instead of elections. "The opposition often quotes social movements in the Middle East to instigate people to take part in street revolutions and in the process manufacture a Malaysian version of the Arab spring," Khairy said.

Najib's authoritarian tendencies, blatant political scaremongering, and the judicial travesty that is Anwar's trial all suggest Malaysia's western allies, including Britain and the US, should take a closer look at their friend. Malaysia is valued as a trading partner, counterproliferation collaborator, and noncombatant member of the Afghanistan coalition. But the government's human rights record and democratic practices merit closer scrutiny.

In a visit last year, US secretary of state Hillary Clinton extracted a promise that Anwar would receive a fair trial. "The US believes it is important for all aspects of the case to be conducted fairly and transparently and in a way that increases confidence in the rule of law in Malaysia," she said. In a recent speech, Clinton urged all states to end discrimination on grounds of sexual orientation.

As Anwar's ordeal approaches an ugly climax, it seems increasingly unlikely that these benchmarks will be met. The next question is: what will Malaysians and their friends do about it?

• This article was amended on 14 December 2011. It originally referred to Umno's youth-wing leader as Najib Khairy Jamaluddin. This has now been corrected