The Australian government is investigating reports a businessman ran a people-smuggling racket in Indonesia, while advising authorities on combating the illegal trade. The latest allegations are part of a growing political storm.

Australian Prime Minister John Howard says the government will investigate reports that Kevin John Enniss advised the government on where and how to catch illegal immigrants, while helping to smuggle others into the country.

The Australian citizen strongly denies being a people trafficker, but admits he worked as an informant for the authorities.

The reports first appeared on Australian television, and have since been carried by other major news media in the country. The television report showed video allegedly of Mr. Enniss telling Indonesian accomplices that illegal immigrants had paid him for safe passage to Australia. He was also allegedly caught by a hidden camera confessing that he reported those who decided not to pay for his services to immigration officials.

Thousands of asylum seekers and economic migrants try to sneak into Australia by boat from Indonesia. Many of them come from Afghanistan, Iraq and other countries in the Middle East, and they often pay as much as 10,000 dollars each to people smugglers.

The reports come at a sensitive time for Mr. Howard's conservative government, which has been criticized for its mandatory detention of asylum seekers who arrive illegally. It also is fighting accusations it misled voters with claims a group of illegal asylum seekers had thrown their children into the water to stop the navy from forcing them back into international waters.

Two-months before last November's federal elections, the Howard government adopted a hard-line policy of using the navy to turn away all asylum seekers caught trying to sneak into Australia by boat. The policy was condemned internationally, but proved popular at home, and Prime Minister Howard subsequently won a third term in office.