Mr Moi has not sought immunity since he stepped down

A former finance ministry permanent secretary told a hearing Mr Moi had given him instructions over the phone.

Kenya lost $600m in compensation paid to Goldenberg International for non-existent gold and diamond exports.

Observers say the revelation will increase pressure on Mr Moi to testify in person before the inquiry.

Wilfred Koinange is the second senior civil servant to name Mr Moi as the source of the authority to make the payment.

Last month, the then head of the civil service, Professor Phillip Mbithi also told the commission that he was asked by Mr Moi in September 1992 to organise a transfer of $76m to Goldenberg.

Investigations into Goldenberg International began a year ago.

Payments

Mr Koinange told the commission investigating the Goldenberg scandal that he was first told to make the payment by Prof Mbithi.

Goldenberg scandal Kenya lost $600m IMF cut aid worth $500m Commission appointed on 24 February 2003

"I telephoned the president and told him I have been informed by Prof Mbithi that I should pay out all the amount outstanding to Goldenberg International and the president said yes, I have spoken to Prof Mbithi," Mr Koinange told the commission sitting in Nairobi.

The Goldenberg scandal cost Kenya the equivalent of more than 10% of the country's annual GDP.

Kenya has negligible amounts of gold or diamonds.

Several of the players involved, including Goldenberg owner Kamlesh Pattni and several government officials, have been prosecuted but never convicted.