Malaysian authorities have condemned rumoured plans for a New Year's Eve sex party at a remote beach, while police warned the "no-underwear" event could be a con job.

Newspaper reports said the party for the under-40s, to be held in southern Johor state bordering Singapore, was being advertised through a website that asked for 250 ringgit (A$104) as an entrance fee.

"A sex party is against our culture and religion and if it went on, it would damage the country's reputation worldwide," Tourism Minister Azalina Othman said according to the New Straits Times newspaper on Tuesday.

"There are other events organised to usher the New Year which are hip, fun and suitable to our culture."

Party organisers had reportedly said that male guests were banned from wearing briefs to the event, while women were only permitted to wear G-string underwear which had to be removed after midnight.

Johor criminal investigation department chief Amer Awal warned that the sex party was likely to be a fraud designed to cheat potential partygoers out of the ticket price.

"The idea of organising such a party is far-fetched but the state Religious Department and local councils have all been informed," he told the New Straits Times, adding that authorities would be on alert.