BEIJING - CHINA, facing a gloomy economic outlook in 2009, has warned government officials to keep their hands out of the public purse in the frenzied period of banqueting and gift-giving ahead of Chinese New Year.

'Officials should live a frugal life and rule out extravagance and waste,' Xinhua news agency paraphrased the official Communist Party corruption watchdog as saying in a circular late on Sunday.

'Feasts, sightseeing and gift-giving with government money are absolutely forbidden.'

The circular warned of penalties on 'defiant' organisations and individuals and threatened to name and shame serious cases, Xinhua said.

The Year of the Ox begins on Jan 26.

Despite a series of high-profile anti-corruption campaigns, official graft remains a major grumble for common Chinese, and the ruling Communist Party has warned it could threaten its monopoly on power.

Authorities earlier this month sacked government officials from Wenzhou, in the eastern province of Zhejiang, for staying in luxury hotels and going sight-seeing during a 'study trip' to the United States. -- REUTERS