The ruling administration of Malaysia’s Negeri Sembilan state is at the brink of collapse after a key ally withdrew support on Monday in a spat that has shone the spotlight on increasingly fragile ties within Prime Minister Anwar Ibrahim’s coalition government.

Anwar has been facing growing pushback from allies and critics alike in recent months, ahead of national polls due in less than two years.

Parties across the aisle are doubling down on contentious issues to bolster support from their...