KUALA LUMPUR - A MALAYSIAN parliamentary panel has cleared the government of any wrongdoing in an aborted deal to buy European military helicopters, an official said on Tuesday.

The Public Accounts Committee, composed of government and opposition lawmakers, said the 1.6 billion ringgit (S$674 million) deal to purchase 12 EC725 helicopters from Eurocopter followed correct procedures.

The committee investigated opposition accusations that the price was too high and the negotiations did not go through proper channels - even though the deal was scrapped last week because of budget constraints amid the global economic crisis.

'According to what we have seen, we were satisfied that all procedures were up to the standard,' committee chairman Azmi Khalid told the wires agencies.

'If there were any wrongdoings, we would have figured it out. But there was nothing that was obvious enough.'

The committee discussed the deal with Defence and Finance ministry officials after opposition politicians claimed there were irregularities in the tender process and that the price tag was too high.

Deputy Prime Minister Najib Razak, who is expected to take over as prime minister next March, had signed the letter of intent to purchase the equipment from Eurocopter, the world's largest helicopter maker, shortly before he handed over the defense portfolio to Prime Minister Abdullah Ahmad Badawi in September.

The Eurocopters were meant to replace an aging fleet of Sikorsky helicopters, renamed Nuri by the Malaysians.

But Abdullah announced last Tuesday that he was suspending the deal because of the financial crisis. He said the government would use the money for other public projects.

Mr Tian Chua, an opposition lawmaker with the People's Justice Party, said the inquiry's conclusions did not quell doubts about the price tag because the panel looked only at procedural issues.

'It does not mean that at each step (the government) made the right decision,' he said.

'There are still a lot of unanswered questions.'

The country's Anti-Corruption Agency is also probing the deal. -- AP