Andrew Lindberg, AWB's managing director, became the first executive to quit his job amid mounting evidence that AWB managers knew about, and tried to cover up, the alleged bribes.

The company said in a statement to the Australian Stock Exchange that Lindberg stepped aside on Thursday, but his resignation does not become official until 30 April.

A government inquiry is examining whether the wheat company, AWB Ltd, knowingly paid up to US$222 million in bogus transport fees to a Jordanian trucking company partially owned by the Iraqi government.

The Jordanian company, Alia, has acknowledged it took the money but says it never moved Australian wheat into Iraq.

Investigators say the money was paid to secure lucrative wheat contracts in Iraq and was funnelled straight into Saddam's coffers, violating UN sanctions.

Alleged corruption

The inquiry was originally called to examine whether AWB officials broke any Australian laws in their oil-for-food dealings, but John Howard's centre-right coalition has also come under scrutiny as evidence emerges suggesting ministers in his government knew about the alleged corruption.

A third senior minister was drawn into the controversy this week, prompting Alexander Downer, the foreign minister, to repeat his denials that the government was involved in any wrongdoing.

"If it turns out there were kickbacks in those contracts, well, the AWB Ltd was very cautious to hide that even from the Wheat Export Authority"

Alexander Downer, 
Australian Foreign Minister

Tim Besley, chairman of Australia's Wheat Export Authority, a government body which reports to the agriculture ministry, acknowledged on Wednesday that his agency was tipped off in mid-2004 to AWB's dealings with Alia.

In a written statement to the inquiry, Besley said he launched an investigation after his agency was "made aware ... that AWB was supplying wheat into Iraq under an arrangement that included overland transport by a Jordanian trucking company".

Responding to parliamentary outcry over whether Warren Truss, then-agriculture minister, knew about the investigation, the government confirmed that Truss had received a confidential WEA report on the matter in October 2004.

Under scrutiny

Truss, now the government's transport minister, is the latest in a string of ministers to come under scrutiny in the inquiry.

Downer and Mark Vaile, the trade minister, have each come under fire this week over evidence that officials in their jointly administered department either knew about, or approved, AWB's dealings with Alia.

But Downer on Thursday repeated the government's steadfast denials of any wrongdoing.

He said: "If it turns out there were kickbacks in those contracts, well, the AWB Ltd was very cautious to hide that even from the Wheat Export Authority."