"Wu is suspected of inflating the price for the ARGO satellite project ... and of benefiting himself and some other people," Lin said, without going into details.

The project, launched in 2005 and named after a ship in Greek mythology, aims to put a satellite into the Earth's orbit by late next year.

Some 21 other people, including Wu's predecessor, space programme officials and a local broker of Canadian-based firm MacDonald, Dettwiler and Associates Ltd, were questioned and released Wednesday, the prosecutor said.

The firm was given the contract to launch the satellite and provide engineering and mission support, but the agreement was scrapped when it failed to get an export license from the Canadian government.

A Taiwanese legislator, Liao Pen-yen, first raised queries about the project in parliament last year.

"There were a couple of suspicions in the case," Liao told AFP.

These included a discrepancy between the satellite launch cost quoted by the space office and the Canadian firm, he said.

Close to 600 million Taiwan dollars (18.18 million US) may have gone to individuals' pockets from contracts linked to the project, he said.

Taiwan has launched a number of satellites, including six weather satellites in April 2006.

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