Towards independence

Its initial goals achieved, UMNO established itself as a political party to fight for independence. At the same time, the Malayan Communist Party (MCP) launched an armed insurgency against what they considered a British puppet state, culminating in the Malayan Emergency which lasted until after independence. The insurgency was marked by a clear racial divide; opposition to the insurrection was almost entirely Malay, while Chinese dominated the communist ranks. The British encouraged the establishment of the Communities Liaison Committee (CLC), comprising the top echelon of Malayan politicians from different communities, to address sensitive issues, especially those related to race. Compromises on a number of issues, including citizenship, education, democracy, and Malay supremacy, were agreed on.. Eventually, a "bargain" between the Malays and non-Malays was formulated; in return for giving up ketuanan Melayu (referred to as the Malays' special position), the Malays would be assisted in closing the economic gap between the Malay and non-Malay communities. CLC member E.E.C. Thuraisingham later said, "I and others believed that the backward Malays should be given a better deal. Malays should be assisted to attain parity with non-Malays to forge a united Malayan Nation of equals."
Problems continued to crop up. Many Malayan Chinese youths drafted into the army to stave off communist attacks fled the country; most participants were English- and not Chinese-educated. To the Malays, this indicated that the Chinese had no particular loyalty towards Malaya and justified ketuanan Melayu, heightening similar perceptions caused by the apparent racial dichotomy between those in fierce opposition to the communists and those supporting the MCP.
In the early 1950s, Onn Ja'afar proposed to open UMNO membership to all Malayans, and renaming it the United Malayan National Organisation, which would have diluted its identity as a champion of ketuanan Melayu. Defeated in an internal power struggle, he resigned in 1951 to found the Independence of Malaya Party (IMP). He was succeeded by Tunku Abdul Rahman (often known as "the Tunku"), who insisted on initial Malay sovereignty. Expressing concern over a lack of loyalty to Malaya among non-Malays, he demanded they clarify their allegiance before being accorded citizenship, going on to state: "For those who love and feel they owe undivided loyalty to this country, we will welcome them as Malayans. They must truly be Malayans, and they will have the same rights and privileges as the Malays."Not long after, in 1952, however, he appeared to contradict himself, and insisted that Malays safeguard their special position: "Malaya is for the Malays and it should not be governed by a mixture of races."

During the early 1950s, there was an active Straits Chinese secessionist movement in Penang agitating against ketuanan Melayu.
During this period, some Straits Chinese began taking interest in local politics, especially in Penang, where there was an active Chinese secessionist movement. Identifying more with the British than the Malays, they were especially angered by references to them as pendatang asing ("aliens"). Avoiding both UMNO and the MCA, they believed that while UMNO and Malay extremists were intent on extending Malay privileges and restricting Chinese rights, the MCA was too "selfish", and could not be relied on. Uncomfortable about the merger of the Straits Settlements with Malaya, they did not feel a sense of belonging in a "Malaya for the Malays" where they were not considered bumiputra ("sons of the soil"). One Straits Chinese leader indignantly declared, "I can claim to be more anak Pulau Pinang [a son of Penang] than 99 per cent of the Malays living here today." With the government's stout rejection of secession, the movement eventually petered out.[
Some suggested that the non-Malays did not feel loyal to Malaya because they did not consider themselves to be of Malayan nationality. To counter this, in 1952 citizenship was granted to nearly all local-born non-Malays, and dual citizenship prohibited, forcing non-Malays to choose between their ancestral homeland and Malaya.
As Malaya moved to self-government, the British initiated the Member System, modeled on the cabinet system; like the CLC, it drew on members of different communities, and was later described as setting a precedent for the power-sharing multiracial Malayan and Malaysian cabinets post-independence. At the same time, the British also began laying the framework for a national education system that would create "a sense of common citizenship". The Barnes Report that they commissioned, however, was strongly objected to by the Chinese community for being "saturated with Malay nationalism" and bolstering ketuanan Melayu. The Fenn-Wu Report, favoured by the Chinese, did not meet with Malay approval. In the end, the Barnes Report's recommendations for English-medium "national schools" were implemented by the 1952 Education Ordinance, over vocal Chinese protests, who were upset by the lack of provision for non-Malay vernacular schools. In 1956, a committee headed by Tun Abdul Razak re-evaluated the education system. The "Razak Report" recommended that vernacular primary schools be permitted to continue, but share a common syllabus with national schools. Vernacular secondary schools would not be sanctioned; only national secondary schools would be funded. The Chinese community strenuously objected to the Razak Report as well, launching an organised campaign against it; the MCA's refusal to oppose the Report cost it politically in some Chinese constituencies.