PANAMA CITY (AFP) - The state prosecutor's office in Panama said on Monday (April 4) that it will launch an investigation into revelations contained in a massive data leak of a law firm that created offshore companies for the world's rich and powerful.

"The facts described in national and international communication media publications under the term 'Panama Papers' will be the subject of criminal investigation," the office said in a statement.

The probe will aim to establish what crimes might have taken place and who committed them, as well as identifying possible financial damages, it said.

The law firm involved, Mossack Fonseca, says the leak of 11.5 million documents from its servers was the result of a "limited hack", suggesting it believed an outside party was responsible.

One of its founders, Mr Ramon Fonseca, told AFP the leak was an attack on Panama itself, which is dependent on its financial services sector.

Panama's President Juan Carlos Varela said his country would cooperate with "whatever government and whatever investigation" resulted from the scandal.

But he also vowed to "defend the image of our country", which had been making progress in trying to lose a reputation as a hub for money laundering and other shady transactions.

While the Panama Papers detail complex financial arrangements benefiting the world's elite, they do not necessarily mean the schemes were all illegal. Most of the services the offshore industry provides can be used for legal purpose and are by law-abiding customers.

But the documents show that banks, law firms and other offshore players often fail to follow legal requirements to make sure clients are not involved in criminal enterprises, tax dodging or political corruption.