The possible move to seek royal pardon was disclosed by Anwar's lawyer Karpal Singh on Wednesday after Malaysia's highest court refused to hear a new appeal against his corruption conviction.
"There's not any more legal avenue, except for executive clemency," said Singh.
"That's where the direction should go from here. He would file for pardon and I will ask him to do so."
But the former finance minister and country's second-in-command, in Germany recovering from back surgery, said he was undecided.
"That's the advice of the lawyers but I think I will have
to see the grounds and what the implications are before I
proceed on that," he said.
A key political confidant said Anwar would not pursue that option.
"Anwar will not ask for a pardon," said Ezam Mohamad Noor, youth leader of the opposition Parti Keadilan Rakyat (Justice party) led by Anwar's wife Wan Azizah Ismail.
"Anwar will not ask for a pardon... His conscience is clear that he has not done anything wrong. Asking for a pardon is an admission of guilt"
Ezam Mohamad Noor,
opposition Parti Keadilan Rakyat
"He made it clear to me from day one. His conscience is clear that he has not done anything wrong. Asking for a pardon is an admission of guilt," Ezam said.
But he added that Anwar might accept a pardon if one was initiated by the government or the king.
Only recourse left
The 1999 conviction prevents Anwar - who spent six years in jail after falling out with the country's then prime minister Mahathir Mohamad - from rejoining active politics until 2008.
A pardon from Malaysian King Syed Sirajuddin Syed Putra Jamalullail, given on the advice of the government, is now the only way for him to rejoin active politics before then.
Anwar had corruption and sodomy charges slapped against him and was thrown in jail after he fell out with his erstwhile mentor Mahathir. He maintains the charges were trumped up to wreck his political career.
Two weeks ago, the Federal Court quashed his sodomy conviction and freed him from jail.
Middle East mediator?
Anwar also said he had received calls and visits from Malaysian and international politicians.
"We spoke about my participation in an international role. Some have mooted the idea of a mediator for the Middle East cause," he said.
"But I don't think I want to come up with any decision in the next few weeks. You need to assess the situation. The political landscape has changed."
The 57-year-old added that he was recovering well after the surgery, walking slowly now and "hoping to jog soon".