The Australian government has been cleared of illegal activity by a commission investigating huge bribes paid by the country's wheat exporter to Saddam Hussein under the United Nations' oil-for-food program. However, a report by a retired judge concludes that executives of Australian Wheat Board did mislead the United Nations and could face criminal charges. From Sydney, Phil Mercer reports.

A judicial inquiry has cleared the Australian government of involvement in the bribery scandal.

The report by retired judge Terence Cole found that the AWB had misled the United Nation's oil-for-food program and had paid huge bribes to Saddam Hussein. Charges against 11 employees could now follow.

The Cole Commission has spent almost a year investigating allegations that AWB had paid more than $220 million in kickbacks to secure lucrative grain contracts.

At issue has been what members of the Australian government knew about these bribes.

Australian Prime Minister John Howard says those accused of knowing about the bribes now deserve an apology.

"They've been accused of dishonesty, of negligence, of incompetence, of cover-ups, of condoning bribes and of turning a blind eye and the commissioner after months of exhaustive examination has not found any evidence to support those allegations," he said.

Opposition politicians remain unconvinced and insist that the AWB affair is the worst corruption scandal in Australian history.

The main opposition Labor party says the government was negligent for failing to respond to diplomatic cables warning that the wheat exporter might have been violating U.N. sanctions. It said the Cole Commission's terms of reference - set by the prime minister - were too narrow, and prevented the inquiry from criticizing ministers.

The opposition leader Kim Beazley told parliament that the government has behaved in a shameful way.

"That they should look at this finding with pride, Mr. Speaker, shows us how low public standards have sunk in this country, how low public accountability has come in this country under this appalling government," Beazley said.

A police task force will now be established to investigate whether criminal charges should be brought against former AWB executives.

The Australian Wheat Board was a state-owned body until July 1999, when it became a private company (AWB) owned by farmers called AWB Limited. It was the largest single supplier of humanitarian goods in Iraq under the oil-for-food program, which ran from 1996 to 2003.

The program was meant to help Iraqi citizens, but an investigation by former U.S. Federal Reserve Chairman Paul Volcker found widespread abuses, including those at AWB.