Jenny Grant, Jakarta – Indonesia's powerful former first family is funding 12 political parties in an attempt to influence the June elections, opposition and party sources said yesterday.

Mulyanah Kusumah, a member of the government team which will select which political parties qualify to compete in the June 7 polls, said the Suharto family was providing financial backing to 12 small parties.

"They want to maintain political influence and to make a political defence mechanism. They also want to create a political safety net by providing this kind of financial support," said Mr Kusumah, who is also the head of the independent election monitoring committee.

He said politicians from the 12 parties met each week at the East Jakarta home of Ibnu Hartomo, the younger brother of late first lady Ibu Tien Suharto. Mr Hartomo was unavailable for comment, but his staff said many new parties used his house for meetings.

A senior source in the National Mandate Party said Suharto family agents offered it 11 billion rupiah and asked for the bank account number of party chairman Amien Rais. "We rejected the money, but it is clear the money machine is already working," the party official said.

Mr Rais, who is likely to be a serious contender for the presidency later this year, launched the Jakarta branch of his party at the weekend.

The Suharto family also has a direct line into larger parties that stand a chance of forming alliances to get elected. Mr Suharto's half-brother, businessman Probosutedjo, was elected chairman of the Indonesian National Party on Sunday.

The National Mandate Party official said: "It's a very big problem, money politics. Suharto wants to stop the election process and make a big mess."

Mr Kusumah said sources of funding might be one criterion for deciding whether parties could contest the polls. "I will recommend that the team should not only use legal criteria but also political criteria. We don't want pseudo-parties," he said.

Other party leaders say they were keen to be funded by the former first family. The head of the Indonesian People's Party, Agus Mitfah, said he would not reject money from the Suhartos: "As a new party I need funds from anywhere – Suharto, Hong Kong, wherever."

Politicians have established 120 parties in Indonesia since political laws were relaxed last year. Parties wishing to compete at the polls must have branches in nine of the country's 27 provinces and at least half of the local regencies in those provinces. Funding that number of branches is difficult for poorer parties.