Obasanjo's administration set up the 19.5 billion naira emergency fund to upgrade Nigeria's aviation infrastructure after a string of air disasters in 2005 and 2006 which killed hundreds of people, including scores of school children.

Experts say many airports in the country are still without effective navigational, surveillance or communication equipment, while the emergency services lack proper search and rescue facilities, raising questions about where the money went.

Nigeria's senate launched an investigation into the spending last month, the latest in a series of parliamentary probes into Obasanjo's governance since his successor, Umaru Yar'Adua, took office just over a year ago pledging zero tolerance for graft.

The Economic and Financial Crimes Commission (EFCC) arrested former aviation ministers Babalola Borishade and Femi Fani-Kayode after they testified at a senate public hearing. Roland Iyayi, the former managing director of the Nigerian Airspace Management Agency, was also detained.

"They were arrested in connection with the ongoing investigation into the disbursement of the 19.5 billion naira aviation intervention fund," EFCC spokesman Femi Babafemi said.

The three are the first high-profile figures to be detained since Farida Waziri, a retired high-ranking police officer chosen by Yar'Adua, took the helm at the EFCC.

Some observers questioned Yar'Adua's commitment to fighting graft after the removal in December of Waziri's predecessor, Nuhu Ribadu, who was credited with the prosecution of several former top government officials.

TELEPHONE THE PILOT

Air safety in Africa's top oil producer has been a source of worry for aviation authorities and passengers since government deregulated the airline industry in the mid-1980s.

More than a dozen private operators have sprouted in the world's eighth biggest oil exporter, with many of them offering charter services, especially to the oil industry. But ageing airports and fleets have struggled to cope with the boom.

At the heart of the probe into aviation spending is a controversial 6.5 billion naira contract for upgrading control tower radar equipment. A consultant to the senate committee said the contract was worth no more than 2 billion naira at best.

There was public outrage in March when rescue workers failed to find a light charter plane which disappeared in rainforest near the Cameroonian border, highlighting the sector's ongoing deficiencies. The aircraft has still not been found.

"We are always improvising. If not for our ingenuity, no aircraft would be flying through the nation's airspace," one air traffic controller told a Nigerian newspaper at the time, adding he still had to use the telephone to communicate with pilots.

Yar'Adua has made respect for the rule of law the cornerstone of his presidency, in a country which is ranked amongst the most corrupt in the world.

Parliament is investigating the management of the mainstay oil and gas industry during Obasanjo's eight-year tenure.

It has also just completed a probe into the power sector, which showed Obasanjo's administration paid non-existent companies more than $50 million meant to finance a revamp of the country's shambolic electricity network.