The Malaysian prime minister says Burma could face expulsion from the Asean group of nations if its government continues to ignore calls to free the jailed opposition leader Aung San Suu Kyi.
"We have already informed them that we are very disappointed with the turn of events and we hope that Aung San Suu Kyi will be released as soon as possible," Dr Mahathir said.
He said that ultimately Burma could be expelled from Asean though he stressed this would be done as a last resort.
It was Dr Mahathir who spearheaded moves to bring Burma into Asean - the Association of South East Asian Nations - in 1997.
The Malaysian leader hoped that trade and political engagement would bring change there, says the BBC's Jonathan Kent in Kuala Lumpur.
Suu Kyi and other leaders of her National League for Democracy (NLD) have been detained by the Burmese military government since the end of May.
Dr Mahathir said that Asean nations had been forced to criticise Burma because its leadership had caused problems and embarrassed its neighbours.
Aung San Suu Kyi's arrest had damaged the credibility of the 10-member group and could lead to Burma's expulsion.
"We will have to examine every avenue before we can take such drastic actions," Dr Mahathir told French news agency AFP.
"In the end, it may have to be that way. I don't say that it cannot be but certainly not at this moment."
Earlier this month the BBC obtained the first eyewitness evidence that the Burmese army directed and orchestrated the attack in May on the motorcade of the democracy leader.
The military government says it was forced to act because Aung San Suu Kyi's National League for Democracy was plotting an armed uprising, but critics reject this charge.
The attack and subsequent detention of Aung San Suu Kyi sparked international outrage and the US Congress has recently imposed sanctions against Burmese exports.
In a wide ranging interview with AFP, Dr Mahathir also repeated his recent assertion that people of European descent are by nature greedy and warlike.
However, he described French President Jacques Chirac who visits Malaysia on Tuesday as "sane and normal" and said he was the exception that proved the rule.
To support his case, he cited Western wars and the behaviour of white colonists in North America and Australia who he said had committed acts of genocide against the indigenous people of those continents.