Jakarta – World Bank President James Wolfensohn on Sunday catagorically denied reports millions of dollars of the bank's funds for Indonesia's poor had been funnelled to the militia that devastated East Timor last year.

"I can say catagorically, catagorically, that the issue of social funds which you alleged went from the bank to assist the militia in East Timor, financed from Indonesia, is simply not true," he told a press conference.

Wolfensohn, speaking at the end of a four-day visit to Indonesia, said the bank did not disburse funds for the social safety net program until January last year. "Our money in social programs went first in January this year. The allegation is made that our funds went to support [the militia] and came from the social programs," he said.

"We were part of an IMF program, that last year put 500 million dollars into general budget suppport. If the Indonesian government at some point financed the militia, they could have done it from any source of funding," he said.

He challenged journalists to back up the allegation with evidence. "We have not seen the evidence. If you bring it I will take a look at it. I am very happy at any time to see the evidence," Wolfensohn said.

The Australian SBS television station has said the Indonesian government diverted at least 7.8 million dollars earmarked by the World Bank for welfare and development to fund the militias who ransacked the territory after its independence vote.

In its report SBS showed the head of the Dili budget section of the Department of Finance, Joao da Silva, searching through his wrecked offices and finding cheque stubs, including one for nine billion rupiah (1.21 million dollars) directed through the Indonesian Ministry of Foreign Affairs.

"Joao da Silva also confirms money from the transmigration department was given to militia groups," the SBS Dateline show said. Da Silva told Dateline he was the officer overseeing the payments to the militias. "Because when they came to the governor [of East Timor] for money, the governor sent them to us and we had to prepare it quickly," he said. "We had to do it quickly because the money was to support their activities."

SBS said Ben Fischer, of the World Bank's Jakarta office, had told SBS he was aware of the situation and sought assurances from Jakarta that using aid money to fund the militias would stop. Wolfensohn implied that SBS had taken Fischer's comments out of context, and the alleged diversion was "simply not the case."

Wolfensohn is scheduled to leave Jakarta for East Timor Monday to meet with the head of the UN transitional administration in East Timor, Sergio Vieira de Mello and the leadership of the Council for East Timor Resistance (CNRT).