"This shocking piece of libel on the character and reputation of Uthayakumar has been disseminated not only widely in this country, but also internationally," Surendran said.
"They have not produced a shred of evidence to prove their claim."
The government has since detained Uthayakumar and four other Hindraf members for up to two years, saying their actions were a threat to national security.
In December, government and police officials said that Hindraf was being investigated for possible ties to groups such as the the Liberation Tigers of Tamil Eelam (LTTE), which is fighting for a separate homeland for ethnic Tamils in part of Sri Lanka.
The LTTE has been branded a terrorist group by the United States and European Union.
|"They have not produced a shred of evidence to prove their claim" |
a lawyer for Uthayakumar
Hindraf has campaigned to highlight what it claims is racial discrimination faced by ethnic Indians, who form 8 per cent of Malaysia's 27 million people.
Many Indians say the Malay-dominated government does not give them a fair chance to get jobs and education.
They also complain their temples are being systematically destroyed. But the government has repeatedly rejected claims of any discrimination.
Malays, who are Muslims, make up about 60 per cent of the population, and ethnic Chinese account for a quarter of the population.
The complaints come at an especially sensitive time with Abdullah Ahmad Badawi, the Malaysian prime minister, expected to call a snap election within months.
In 2001, five people were killed and 37 wounded in riots between ethnic Malays and Indians. In 1969, hundreds were killed in rioting between Malays and ethnic Chinese.