The loss of seats also broke the BN's hold on two-thirds of the parliamentary majority which enabled to amend the constitution without debate.
On Monday, Malaysian stocks dived six per cent to a seven-month low with the ringgit also falling as the market reacted to the political uncertainty following the coalition's heaviest election losses in 50 years.
Earlier Abdullah had said he did not have to step down because he still had strong support from BN party leaders.
"I will not resign because there is no pressure," he was quoted as saying by national news agency, Bernama, on Sunday.
Abdullah, president of the United Malays National Organisation (Umno), is expected to meet his party leaders in a special session later on Monday.
Umno is the main coalition partner in the BN stable of 14 ethnic-based component parties.
The coalition also lost a number of senior leaders and cabinet ministers to the opposition Democratic Action Party (DAP), Islam-based PAS and Keadilan, which has close ties to former deputy prime minister, Anwar Ibrahim.
Aside from parliamentary losses, the BN lost control in five of Malaysia's 13 states including Penang, Abdullah's home state, and Kedah, the home state of his predecessor, Mahathir Mohamad, who was prime minister for 22 years.
Penang, which was ruled by Gerakan, the fourth biggest coalition partner, for nearly 40 years, fell to the DAP, while Perak, Kedah and Selangor are now under opposition rule.
Among the major upsets was the defeat of S Samy Vellu, president of the Malaysian Indian Congress (MIC), in the Sungai Siput constituency which he has held since 1974.
"A weak government in a multiracial country will find great difficulty in running the country"
Mahathir Mohamad, former PM
Samy Vellu, the longest-serving cabinet minister, reportedly made a hasty retreat as the final results were announced, saying only "Goodbye" to reporters.
His defeat, and the slashing of the MIC's parliamentary presence from nine to three seats, was seen as part of a backlash by ethnic Indian voters following recent high-profile protests against alleged racial discrimination.
Popular bloggers, Jeff Ooi and Tony Pua, who contested in the elections for the first time won seats in parliament, posting big margins against more senior BN candidates.
Both men stood as candidates for the DAP.
In 2004, Abdullah, widely known to supporters as "Pak Lah", led the BN to a record win, scoring nearly 64 per cent of the popular vote and just over 90 per cent of seats in parliament.
|Mahathir, who stood down in 2003 in favour of |
Abdullah, urged his successor to quit [Reuters]
Calling on his successor to stand down following Saturday's vote, Mahathir, said Abdullah should take 100 per cent responsibility for the coalition's disastrous election showing.
The former prime minister said he had "apparently made the wrong choice" in choosing Abdullah to succeed him, accusing his successor for destroying the BN.
"It's shocking," Mahathir said on Sunday.
"We have now a very weak government, and a weak government in a multiracial country will find great difficulty in running the country."
Mahathir, who stood down in 2003, has been increasingly critical of Abdullah in recent years, accusing him of turning a blind eye to corruption, nepotism, and weak leadership.
BN leaders however sought to show a united stance, expressing their full support for Abdullah to continue leading the coalition and country.
"The prime minister has a full mandate. He will appoint a new cabinet," Ahmad Zahid Hamidi, the deputy information minister, told The Associated Press.
"There is no one person to blame for what happened. We all are taking the collective responsibility."