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Applying through UCAS whilst already studying locally in Malaysia.
You need to be honest about where you are studying and the qualification you have started. State that your circumstances have changed, that you now have the possibility of funding to study in the UK. This should all be mentioned in your personal statement.
It is not a good idea to start a profession which requires professional integrity with a misleading application, so you must be transparent.
As an aside, it may be possible to apply direct for a transfer (if you plan to complete the first year.)
If you have any more questions about the applications, you may find the answers here: www.thecompleteuniversityguide.co.uk/universities/.../
Best of luck!