(Updates with comments from a statement by the Cabinet Secretary, adds background)
By Miyoung Kim
SINGAPORE, June 14 (Reuters) - Singapore Prime Minister Lee Hsien Loong's younger brother and sister said on Wednesday they have lost confidence in the nation's leader and fear "the use of the organs of the state against us."
"We are concerned that the system has few checks and balances to prevent the abuse of government. We feel big brother omnipresent," Lee Wei Ling and Lee Hsien Yang said in a joint news release and an accompanying six-page statement issued at 2 am Singapore time.
As a result, Lee Hsien Yang and his wife, Lee Suet Fern, would be leaving Singapore. "I have no desire to leave. Hsien Loong is the only reason for my departure," he said.
"We feel hugely uncomfortable and closely monitored in our own country," they said, in a rare public display of discord at the top of a city state that usually keeps such matters behind closed doors.
In a statement, the prime minister denied the allegations made by his siblings, and said he was very disappointed that they have chosen to publicise private family matters.
"I'm deeply saddened by the unfortunate allegations that they have made," he said. "While siblings may have differences, I believe that any such differences should stay in the family," added Lee, who is overseas on holiday with his family.
At the heart of the family dispute is whether a house in which their father, Lee Kuan Yew, lived most of his life should be demolished. He was the first prime minister of Singapore and ruled the country for three decades.
Before he died in 2015, the founding father of modern Singapore made it public that he wanted the house, a humbly furnished home with retro furniture near the bustling Orchard shopping district, demolished.
But the prime minister's siblings claim that he and his wife, Ho Ching, had opposed the wish.
Lee Hsien Yang told Reuters he still remained in Singapore as of Wednesday but said he was planning to leave "for the foreseeable future." He is a former CEO of Singapore Telecommunications Ltd and is currently the chairman of the Civil Aviation Authority of Singapore.
The siblings provided no specific evidence of action by the Singapore government against them. Reuters was unable to independently verify the accusations.
"There are many ways that messages get sent to people to make them feel unwelcome and I have received many messages. Not from my brother because we communicate via lawyers," he said in an interview.
"I would not do this if I did not feel threatened," he said, adding that he is not an impetuous anti-establishment figure out to attack the Singapore government or his brother.
The siblings said they believed the prime minister and his wife "harbour political ambitions for their son, Li Hongyi."
In his statement, Prime Minister Lee said he and his wife, who is chief executive of state investment firm Temasek Holdings , "especially" denied the allegation that they had political ambitions for their son, saying it was "absurd".
Their son, Li Hongyi, who previously worked for Google as a product manager and studied at the Massachusetts Institute of Technology, currently works for a state technology agency.
Prime Minister Lee said he would continue to uphold meritocracy as a fundamental value of Singaporean society.
"Since my father’s passing in March 2015, as the eldest son I have tried my best to resolve the issues among us within the family, out of respect for our parents ... My siblings’ statement has hurt our father’s legacy. I will do my utmost to continue to do right by my parents."
In an interview with the Straits Times in 2011, Lee Kuan Yew expressed his views about the future of the house.
"I've seen other houses, Nehru's, Shakespeare's. They become a shambles after a while. People trudge through," he said. "Because of my house, the neighbouring houses cannot build high. Now demolish my house and change the planning rules, go up, the land value will go up."
Prime Minister Lee said in December 2015 that he had recused himself from all government decisions involving the house and, in his personal capacity, would also like to see Lee Kuan Yew's wish honoured.
But the siblings say that the prime minister had subsequently asserted at a special ministerial committee set up to consider options for the house that Lee Kuan Yew would have accepted "any decision by the government to preserve" the house.
Lee's siblings accused the prime minister of wanting to “milk Lee Kuan Yew's legacy for their own political purposes" and claimed that the preservation of the house would enhance their brother's political capital.
In a statement issued through the Prime Minister's Office, Cabinet Secretary Tan Kee Yong said that Lee had recused himself from all government decisions concerning the house. However, it also said that the ministerial committee had sought his views in a personal capacity given he was Lee Kuan Yew's eldest son and was a beneficiary of the estate.
Tan also said the committee had asked the younger siblings to answer questions about how Lee Kuan Yew's will was prepared, and in particularly the role that Lee Hsien Yang's wife, Lee Suet Fern, and lawyers in her law firm had played.
It is the second time in 15 months that the issue has exploded into public view. In April 2016, Lee Wei Ling accused the prime minister of abusing his power.
This time the involvement of both siblings, and Lee Hsien Yang's decision to leave the city-state have taken it to a new level.
The prime minister's office didn't respond to a series of questions about the dispute that were emailed by Reuters.
Major Singaporean media reported prominently on the division in the family on Wednesday, mostly leading with the prime minister's response to the siblings' accusations. There was no apparent reaction on Singapore's financial markets, with stocks down 0.1 percent and the Singapore dollar little changed.
The prime minister said he will consider the matter further when he returns to Singapore this weekend. (Reporting by Miyoung Kim; Additional reporting by Aradhana Aravindan, Fathin Ungku, Chyen Yee Lee and Masayuki Kitano; Editing by Martin Howell)