Malaysia signed the Rome Statute, the ICC's founding treaty, in March but still had to ratify it to formally become a member of the The Hague-based tribunal.
Opposition parties objected to it on racial grounds that it could undermine privileges for Malays, as well as the immunity of nine Malay state rulers. The wealthy ruler of southern Johor state also recently accused the government of breaching the constitution by signing the treaty.
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On Friday, Mahathir said the cabinet had decided not to ratify the Rome Statute as it has been manipulated by his opponents. He rejected allegations that the treaty will undermine Malaysia's sovereignty and its royal families.
"This is not because we are against it but because of the political confusion about what it entails, caused by people with vested interest," a visibly upset Mahathir told reporters.
"I see this as a way to blacken my face because they know they cannot oust me easily," said the 93-year-old.
Policy flip-flop
The move is the latest policy u-turn by the government, which took office in May last year after an opposition alliance led by Mahathir defeated a ruling coalition that had governed Malaysia for 60 years by promising to tackle corruption, repeal rights-abusing laws and turn the country into one of Southeast Asia's leading democracies.
Late last year, the government backtracked on signing a key United Nations treaty against racial discrimination after opposition parties objected to the plan, claiming it would undermine the constitution and the rights of the majority Malays.
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Mahathir's government still struggles with racial issues as many Muslim Malays, who account for two-thirds of the population, support the opposition.
Traditional ethnic Malay rulers constitutionally head nine of Malaysia's 13 states. They do not have executive power but are highly respected among Malay Muslims.
Mahathir criticised efforts to engage Malaysia's royal families in the discourse against the government.
"They claimed the law negates the rights of the Malays, the rights of the rulers. It's absolute nonsense," he said.
"We understand that this is a political move to get the rulers to back them up. Of course, some members of the royal family may be involved, but the whole idea is to get the royalty in Malaysia to go against the government."
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