By Vaudine England

Jakarta - The Indonesian Government diverted millions of dollars in World Bank aid money to finance the establishment of the militia groups that laid waste to East Timor last year, Australian television claims. Two of the sources used in the TV report, former militia leader Thomas Goncalves and former double agent Rui Lopes, told the South China Morning Post last September of the meetings and planning that went into the militia violence.

Mark Davis, of TV channel SBS' Dateline program, went to the East Timorese capital, Dili, to find the bureaucrats responsible for distributing the checks. The program shows the head of the Dili budget section of the Department of Finance, Joao da Silva, searching through his wrecked offices and finding check stubs, including one for nine billion rupiah (HK$9 million) directed through the Indonesian Ministry of Foreign Affairs.

"Joao da Silva also confirms money from the transmigration department was given to militia groups," the Dateline show says. But they were not the only departments to contribute to the "socialization of autonomy", a term that became open code for propaganda and militia activity designed to ensure the victory of pro-Indonesian groups in the August 30 referendum.

All Indonesian government departments had to donate. Transmigration, Agriculture, Forestry - all had to give funds for the "socialization of autonomy". "The intimate connections between ministries and the militias began in Jakarta in February 1999 at a dinner at the home of the Minister for Information, Yunus Yosfiah," Dateline says.

It also implicated the World Bank which, once it knew how the money was being used, lodged a protest but could not stop the diversion of funds. At least HK$59 million of World Bank aid money was used to fund militia activities in East Timor, according to the report, which was to be broadcast in Australia last night. Ben Fisher, of the World Bank's Jakarta office, told SBS he was aware of the situation and sought assurances from Jakarta that using aid money to fund the militias would stop.

World Bank President James Wolfensohn arrives in Jakarta today on a four-day visit, just as UN chief Kofi Annan flies from Jakarta to East Timor.

On the program, then Indonesian foreign minister Ali Alatas shook with rage as he denied the accusations. "I don't know what you are talking about, because you are talking about things as if we are in the business of funding the militias," Mr Alatas said. "How can I talk about things which we did not do?"

The report is sure to stir already troubled waters as the world pressures Indonesia to punish whoever was responsible for the East Timor violence, and as the economy depends heavily on the World Bank and other foreign donors.

[Photo comment: Dust storm - East Timorese children watch a UN helicopter as it lifts cargo from a Dili beach. Kofi Annan will arrive in East Timor today.]