Ms Tan Hoon Cheng, a reporter of the Chinese-language newspaper Sin Chew, was arrested on Friday under the Internal Security Act, which allows indefinite detention without trial. She was, however, freed on Saturday.
An opposition lawmaker and the editor of a pro-opposition news website were also detained under the ISA on Friday, but have not been released.
The action has drawn widespread criticism from opposition politicians, the Bar Council, human rights groups and now even by some in the government-controlled media.
Ms Tan's arrest 'will go down in Malaysian history as the most controversial, if not most ridiculous,' Mr Wong Chun Wai, the editor of the influential Sunday Star, wrote in a signed opinion piece.
The Star is owned by the Malaysian Chinese Association, the second largest party in the ruling coalition after Prime Minister Abdullah Ahmad Badawi's United Malays National Organisation party.
Mr Wong's article is in some measure a reflection of the Chinese association's growing unhappiness with Umno, which controls most power in the country. A wedge was driven between the two last month after Mr Ahmad Ismail, an Umno politician, described the ethnic Chinese minority as 'squatters' and accused them of hungering for power.
Ms Tan was the first journalist to report the comments.
The schism in the ruling coalition comes as it faces the threat of being ousted by opposition leader Anwar Ibrahim, who has capitalised on a deep feeling of discrimination among the minority Chinese and Indians.
On Saturday, Home Minister Syed Hamid Albar defended the three detentions by saying they were necessary to prevent racial conflict.
He said Ms Tan, an ethnic Chinese, was arrested because police received information that her life had been threatened.
If that was the case, police should have given her protection instead of arresting her, said Malaysian Chinese Association youth wing chief Liow Tiong Lai.
'It is not a clever excuse,' he said in a statement.
'To put it bluntly, the arrest was outrageous and went against the grain of natural justice,' Mr Wong wrote.
'In the eyes of the world, we are becoming more like a political basket case each day as old politicians attempt to bring back their outdated tricks,' he wrote.
Many Malaysians have also been outraged that Mr Ahmad, the Malay politician, faced no legal action for his allegedly seditious statements. He was suspended from the party for three years.
'There is a sense of injustice and hurt among people that the perpetrator has been let off scot-free while the messenger has been penalised,' Mr Wong wrote.
He said Mr Ahmad's racist comments were sufficient to get him charged with sedition or arrested under the ISA.
'But the ISA is a draconian and archaic law. It shouldn't be used even against Ahmad, as this deprives him of the right to defend himself in open courts,' he wrote.
In a separate editorial, the newspaper joined opposition parties, lawyers and human rights groups in demanding an end to the Internal Security Act.
The law 'is a shameful blot on the country's dignity,' it said. -- AP
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