Media reports in PNG claimed there was a money trail of corrupt payments from Singapore through Australia to Port Moresby, with $US27million ($31 million) being withdrawn from one account around the time of last year's PNG national elections.

PNG's Post Courier newspaper reported last month that one minister had received $US40 million in allegedly corrupt payments. The report led to a heated parliamentary exchange in Port Moresby between Deputy Prime Minister Patrick Pruaitch and Forest Minister Belden Namah.

Mr Pruaitch was Mr Namah's predecessor as Forest Minister in the last government, when he firmly rejected claims of corruption in the logging industry.

PNG government sources told The Australian that Chief Ombudsman Chronox Manek was investigating the corruption allegations after receiving records of Singapore bank accounts from the Post Courier. The records indicated that two ministers received a total of $US45 million, which was deposited in the accounts.

The Australian reported in June the results of a five-year study, using satellite images, showing logging had destroyed almost four million hectares of PNG rainforest over 30 years.

A succession of reports from PNG authorities, the World Bank and other sources have concluded that much of the logging was illegal.

The Ombudsman Commission is determining whether the payments to the Singapore bank accounts were derived from a 2per cent take of logging export revenues from operations in the Gulf Province in southern PNG.

In past reports, the commission has concluded that requirements of the National Forestry Plan were not met during the issuing of logging concessions in the province.

The Prime Minister's family is involved financially with the logging industry in the Sepik region of northern PNG. Sir Michael is not one of the ministers under investigation.