AUSTRALIAN Federal police will investigate claims that an Australian Government-funded

school in Cambodia was used to procure children for abuse by Australian pedophiles

with links to a diplomat.

The investigation will examine whether people associated with the school, called

the Australian Centre for Education (ACE), used their jobs to befriend underage sex

victims.

The allegations about the school are at the centre of claims about pedophilia linked

to Australian diplomats that prompted an independent federal inquiry announced this

week by Australian Foreign Minister Alexander Downer.

The claims relate to the activities of a group of Australian homosexual friends associated

with the school.

At least one of the men is a suspected pedophile.

One foreigner, not an Australian, employed by the school was found to have had a

young boy in his house. The men sometimes held parties in the home of the diplomat,

who is no longer in Phnom Penh.

The men have also left the country, which became a favored destination for the

world's pedophiles in the early 1990s. But at least one of them has a new job that

gives him access to children.

The school, regarded as one of the most successful Australian aid projects in Cambodia,

runs English-language and other programs for 4,000 students, most of them adult.

It also runs classes for teenagers.

The school has received hundreds of thousands of dollars a year in Australian aid

money.

The director of the school, Paul Mahony, said that since he arrived in Phnom Penh

12 months ago there has not been any suggestion of problems like pedophilia at the

school, which has branches in three Cambodian provinces.

"There are some allegations around Cambodia," he said. "It is going

on in Australia too. I suppose we should expect mud in all directions."

Mahony declined to reveal how much Australian Government money goes to the school.

But it has been the focal project of Australia's $30 million a year civilian aid

program for Cambodia.

Hundreds of Cambodian military officers and other government workers have learnt

English at the school at Australia's expense.

Downer decided on an inquiry independent of the Department of Foreign Affairs and

Trade after the Sydney-based Sun-Herald newspaper published allegations that Australian

aid money was used to provide victims for Australian paedophiles.

The allegations include that diplomats organized weekend trips with orphans and other

children for the perverted pleasure of visiting friends.

The inquiry will ask the federal police to investigate the allegations which have

been made by former and still serving diplomats.

The allegations are regarded as among the most serious ever made against the department,

which employs 4,000 people.

The allegations have severely embarrassed the Howard Government as it works to cement

ties in Asia.

The Cambodian Government is understood to have been concerned about the suspected

activities of some Australians in Phnom Penh. It warned in an unofficial communication

to Canberra about one person in 1993, according to Phnom Penh government sources.

No action was taken by Australian authorities.

Some foreign aid workers in Phnom Penh were suspicious of the men's activities, but

there was a reluctance to speak out. A public scandal could affect aid funds. One

aid worker with a group that campaigned against child sex was quietly pressured to

leave Phnom Penh after suspicions he was sexually abusing a teenager, according to

aid organization sources.

There is a concern among aid workers that accusations about paedophilia not be confused

with homosexual practices and that any inquiry not be "homophobic."