New corruption allegations have emerged in South Africa as investigations continue into a multi-billion dollar arms deal with European weapons manufacturers.

One of the successful bidders, the European Aeronautical Defence and Space Company, has faxed a letter to South African national newspapers admitting that it helped to secure luxury cars for around 30 South African officials.

The company, which is partly owned by the Mercedes Benz manufacturer, Daimler Chrysler, says it rendered assistance in acquiring the vehicles for what it called VIPs in the diplomatic, political and defence sectors.

Investigations so far have suggested that the cars were not given to the officials as gifts, but were sold at reduced prices.

ANC denial

These are by far the most serious allegations of corruption to have emerged since South Africa sealed the deal with European weapons manufacturers almost two years ago.

Opponents of the arms deal have long accused the governing African National Congress of accepting bribes and have demanded an independent inquiry into allegations of corruption.

The ANC has consistently denied any charges of wrongdoing, but it has resisted attempts to bring in an independent judicial investigator to examine the deal.

The scandal surrounding the supply of luxury cars has enveloped senior officials within the ANC.

Even the party's chief whip, Tony Yengeni, has been accused of accepting a bribe. He has now being investigated by a team appointed by the government.