Environmental investigators said Thursday they had uncovered massive timber smuggling from Indonesia's Papua province to China in what they described as the world's largest logging racket involving one wood species.

The London-based Environmental Investigation Agency (EIA) said 300,000 cubic meters of merbau is smuggled out of Papua every month to feed China's timber processing industry. Merbau is a hardwood prized for its strength and durability and used mainly for flooring.

"It's probably the largest smuggling case that we've come across in our time of research on illegal logging in Indonesia," Julian Newman, the group's head of forest campaigns, said. "This illegal trade is threatening the last large tract of pristine forest in the whole Asia-Pacific region."

China is the world's No 1 buyer of illegal timber owing to a continued economic boom, the EIA claims, and Hong Kong is a key cog in the business.

The investigation revealed that in a just a few years, Zhangjiagang - what was until a few years ago a small anchorage near Shanghai – has been become the largest tropical log trading port in the world, the group said. And a nearby town has become a global center for wood flooring production, with 500 factories together consuming a merbau tree every minute.

Illegal logging in Papua is said to involve Indonesian military and civilian officials, Malaysian logging gangs, multinational companies, brokers in Singapore and dealers in Hong Kong.

Syndicates pay around US$200,000 dollars per shipment in bribes to ensure the contraband logs are not intercepted in Indonesian waters. Indonesia has banned the export of logs.

"There's no denying that military officers are involved in illegal logging," said Muhammad Yayat Alfianto of the Indonesian environmental group Telapak, which worked with the EIA in the investigation.

Sam Lawson of the EIA said merbau smuggling was worth US$1 billion a year based on the wood's value in the West. The profits are vast as Papuan communities only received around US$10 for each cubic meter of merbau felled on their land, while the same logs fetch as much as US$270 per cubic meter in China.

"Papua has become the main illegal logging hotspot in Indonesia," Alfianto said. "The communities of Papua are paid a pittance for trees taken from their land, while timber dealers in Jakarta, Singapore and Hong Kong are banking huge profits."