2007-05-31 12:14:50 -

TAIPEI, Taiwan (AP) - Investigators detained the head of Taiwan's budding space program Thursday, amid allegations that funds were spent illegally in seeking to acquire a satellite from Canada, a prosecutor said.

Lance Wu, head of the state-funded National Space Center, was detained after officials questioned him at NSC headquarters on suspicion of «passing favors»

to businesspeople brokering the deal with Vancouver-based contractor MacDonald Dettwiler and Associates or MDA, said prosecutor Lin Hui-yin.

«We suspect that the program was over--budgeted» among other irregularities, Lin said.

A Taiwanese dealer for MDA was questioned but not detained, she said.

The ARGO Satellite was a core program at the space center, which was established in 2003 to develop Taiwan's space program.

The center awarded MDA the 900 million New Taiwan dollar (US$27 million; ¤20 million) contract to build the satellite and accompanying launching rocket in 2005.

However, it was forced to cancel it late last year because the Canadian firm failed to obtain an export license from authorities.

Taiwan's China Times newspaper said MDA had received full payment from the space center, and only returned the money after Taiwanese lawmakers began looking into the deal. The paper quoted unidentified investigators.

The report also said that after the program was halted, the space center continued to honor an NT$649 million (US$20 million; ¤15 million) contract to import related satellite components from an Italian supplier.