There are lots of options. However, considering that time is limited and that you want to visit Sabah and do some beach, consider the following itinerary:

Day 1: arrive in KL; visit KL and relax
Day 2: visit KL; in the late afternoon fly KL-Sandakan with Airasia AK5192, 17:50-20:40
http://www.airasia.com/ot/en/home.page
Day 3: charter a car or minibus for the whole day; morning trip to Sepilok (orangutans), afternoon trip to Labuk bay (proboscis monkeys), after Labuk bay drive to Sukau on the Kinabatangan river
http://www.molon.de/galleries/Malaysia/Sabah/Wildlife/
Day 4: wildlife excursions on the Kinabatangan river
Day 5: wildlife excursions on the Kinabatangan river
Day 6: one more wildlife morning trip, then back to Sandakan, catch Airasia AK6495 flight to KK (14:35-15:20), then catch Airasia flight AK6359 (21:10-22:35) to Kuching
http://www.molon.de/galleries/Malaysia/Sarawak/
Day 7 - Day 9: explore Kuching, national parks around Kuching, Sarawak cultural village
On day 9: evening flight to KL, spend the night at the airport terminal (Tune hotel)
Day 10: 8am flight or 10:20am Airasia flight to Kota Bharu, taxi to Kuala Besut, boat to Perhentian island; rest of the day on Perhentian
Day 11-13: Perhentian island (beach, snorkelling etc)
Day 14: back to KL

You can also reduce Borneo by a day or two and make a side trip to Melaka from KL.

No need to book any tours. You can book all flights by yourself and charter the taxis on your own.

The above itinerary sounds a little ambitious to me, especially since in includes Sarawak, which you haven't expressed any interest in. There are also a lot of flights, which with a family of five will be expensive, even on Air Asia.

I would stay in Sabah rather than flying to Kuching and then on to Kota Baru. There are overland tours to Kota Kinabalu from Sandakan, or you could fly there, and stay at one of the beach resorts outside KK or on one of the nearby islands. They're just as nice, and probably less crowded that the Perhentians.

After KK, fly back to KL and spend a day or two more there to wind down and prepare for the (probably long) flight back.

There is actually not that much to do in KK and the beaches there are rather mediocre, if compared to Perhentian.

But, amin, you have them flying all over Malaysia just to get a better beach. There are some lovely beaches outside of KK.

I agree with Michael, the itinerary outlined is way too much traveling, too little experiencing. It looks like a travel agent's itinerary - they want you always on the move so you feel like you got your money's worth as opposed to slowing down and experiencing. Especially with children, you want to settle in places.

mapleg, you can certainly do what you want independently. Absolutely no need for a tour.

But, Kathie, it's just two flights. They leave in the evening and are on Perhentian the next day.
There are no decent beaches around KK and accomodation on Pulau Manukan is very expensive: 286 Euro for a double room if you book in advance over the Internet. Just imagine what a family of five would pay. On the other hand I hope you are not suggesting that they spend their beach holiday in a city.

Perhentian has much, much better beaches, crystal clear water and much more affordable accomodation.

Regarding the itinerary, they are in four places in two weeks (KL, Sandakan, Kuching, Perhentian) - perfectly doable. Besides this is just a proposal. The OP will decide in the end decide what to do and what not to do.

thank you everyone am sitting down with computer, glass of wine and husband to work out what is doable. Really welcome all your help

FWIW, we are going to be in Malaysia in June ( family of 4, kids 6 and 8 ) and our itinerary is something like

KL 4 nites
Penang 4 nites
Perhantians 5 nites
Somewhere yet to be decided 3 or 4 nites

Borneo is great just remember there will be a load of road travel involved.

Let us know what you settle on.