Widespread corruption has been cited as one of the elements hurting Indonesia's struggle to lure foreign businesses to invest in badly needed infrastructure projects.

President Susilo Bambang Yudhoyono rose to power in 2004 with a vow to combat graft in Indonesia, ranked among the world's most corrupt countries according to Transparency International.

Since his high-profile anti-graft campaign started, officials ranging from a former religious affairs minister to the governor of Aceh province have been jailed on corruption charges.

Helping spearhead the drive has been the anti-corruption commission, KPK, which has the power to make arrests, take over investigations from the police and fast-track sensitive cases.

"Corruption is an extraordinary crime. Corruption denigrates the dignity of the nation, the state and and the government. Corruption disrupts national stability and hurts development," KPK chief Taufiequrachman Ruki said in a speech before signing a cooperation pact with the State Audit Agency.

"What is clear is that corruption violates human rights," said the former police general who has led the KPK since its formation nearly three years ago.

KPK's most high-profile case so far involves a probe into the election commission, a body comprised largely of respected academics which won praise for organising the 2004 elections.

The chief election commissioner and several other officials have been sent to jail over poll-related kickbacks.

However, the case also sparked friction with the State Audit Agency (BPK) which did not like how KPK used a state auditor to catch an election commissioner red-handed while he was trying to carry out bribery in a hotel room.

"Auditors should not be turned into intelligence agents or detectives. If there is such an overacting state auditor, no auditee will want to be audited," said BPK chief Anwar Nasution.

The deal between the two institutions covered information sharing, joint training and communication enhancement.

Asked about World Bank accusations some Indonesian projects had been marred by graft, KPK's Ruki told reporters talks between his agency and the global body were underway behind closed doors.

Last week Indonesia's finance minister urged the World Bank to be more open with countries about its corruption investigations.

The Bank last month announced it had uncovered corruption involving public works officials in road projects it funded in eastern Indonesia and cancelled the portion of the loan associated with the affected contracts.