KUALA LUMPUR, MALAYSIA - MALAYSIA'S opposition has staged a stunning upset and won northern Penang state, the industrial heartland, from the ruling coalition in general elections on Saturday, sources on both sides of politics said.

'It's bad. They have lost Penang,' a source close to Prime Minister Abdullah Ahmad Badawi told Reuters only two and a half hours after polling booths closed at 0900 GMT.

'It's a perfect storm,' he added. 'Big guns are falling all over the place.'

A lawmaker from the main opposition Democratic Action Party (DAP) said unofficial figures showed the opposition was leading in 17 of Penang state assembly's 40 seats.

Local independent news Web site malaysiakini said it was leading in six more seats. -- REUTERS