"We are determined that truth must prevail in this matter," the Congress party premier told parliament on Friday as opposition members jeered.

 

"Our government believes in maintaining high standards of probity and transparency in public life and I can assure the house that no one who is guilty will go unpunished."

 

The pledge followed allegations by Anil Maithrani, India's ambassador to Croatia, that Natwar Singh, the former foreign minister, and Congress got vouchers to buy oil cheaply from Baghdad when the Congress party was out of power.

 

The statements, aired on Aaj Tak television, a privately owned channel, sparked chaos in parliament and demands for Natwar Singh to be prosecuted.

 

Maithrani version

 

Maithrani said: "The Iraqi embassy in Amman was a very key player. The Iraqis needed a green light, the green light was provided to them by Natwar Singh."  

 

He worked closely with Natwar Singh in the Congress party, elected in 2004 as the head of a multi-party coalition, before being posted as ambassador to Croatia.

 

Natwar Singh resigned as foreign
minister following the scandal

Maithrani said one (oil voucher) was given to him (Natwar Singh) by name, the other one was given to the Congress party during a visit to Iraq in January 2001. 

 

Natwar Singh led a four-member team to Iraq that included Maithrani.

 

Maithrani said: "The fact of the matter is that both allottees ... in my view are exactly the same ... one has been (given) to Natwar and the other one to the Congress party.

 

"One (was) for Natwar's personal services. Don't forget that he has been the one who has been espousing Iraq's cause."  

 

The fresh allegations followed a report by Paul Volcker, the former US Federal Reserve chairman, to the UN in October that said that the regime of Saddam Hussein, the former Iraqi president, manipulated the oil-for-food programme to extract about $1.8 billion in surcharges and bribes.

 

Beneficiary

 

Volcker named Natwar Singh as a beneficiary of four million barrels of Iraqi oil allotted to Masefield AG, a firm based in Zurich.

 

Congress, India's oldest political party, is also listed as a beneficiary of a separate allotment of four million barrels of oil as part of the transactions.

 

"These are totally false and malicious allegations. My conscience is clear and I am ready to face any inquiry so that my name is cleared"

Natwar Singh,
Former foreign minister

Natwar Singh, who has consistently denied any wrongdoing, was stripped of his foreign ministry portfolio last month when the scandal surfaced, but was retained as a minister without portfolio. Congress has also denied any wrongdoing.

 

Natwar Singh told reporters: "These are totally false and malicious allegations. My conscience is clear and I am ready to face any inquiry so that my name is cleared."

 

The government ordered two separate investigations after the release of the Volcker report.

 

Manmohan Singh told parliament that the wing of the finance ministry that probes financial irregularities would consider the latest allegations as part of its investigation into the matter.

 

But he said that the outcome of a judicial inquiry into the original allegations should not be prejudged.