KUALA LUMPUR, Nov. 11 -- The federalgovernment has decided not to appeal the Kota Kinabalu High Court's decision affirming Sabah's constitutional entitlement to 40 per cent of federal revenue collected from the state - but will challenge parts of the judgment it says contain "defects" and inaccurate claims.

In a statement today, the Attorney General's Chambers (AGC) said the government respects the constitutional basis of the 40 per cent Special Grant provision and will begin negotiations with the Sabah government "urgently" to implement it.

However, the AGC said the written judgment included statements suggesting that both the federal and Sabah governments had "abused their powers and breached constitutional duties" dating back to 1974...