NO CHINALCO CONNECTION

The nine-member standing committee of China's Communist Party, led by President Hu, had taken more control over economic decisions at the expense of the State Council, led by Premier Wen Jiabao, the Herald said, quoting anonymous Chinese economic advisers.

The inquiry began before Rio Tinto broke off its $19.5 billion investment deal with Chinese metals firm Chinalco and instead formed an iron ore joint venture with rival BHP Billiton on June 5, the sources told the paper.

"This is certainly not revenge for the Chinalco deal not going through," the Herald quoted one Chinese government source as saying.

The collapse of the Chinalco deal was immediately followed by the establishment of a high-level group that would assess the political and economic risks of large overseas investment deals, the paper said.

Australian Prime Minister Kevin Rudd, who returned on Monday from a week-long overseas trip, is under pressure from the opposition to personally intervene in the case.

"Pick up the phone Mr. Rudd, pick up the phone Mr. Smith, speak to your Chinese counterparts and make it absolutely clear there must be procedural justice immediately," opposition frontbencher Greg Hunt told Sky News. "They are worried about the relationship, they are not worried about the Australian citizen." Australian authorities were pressing for details of the allegations against Hu, Smith said, adding that China had still not revealed to them any evidence supporting the detentions.

Chinese media reports say information from an internal meeting of the China Iron and Steel Association on the negotiations was leaked, and have reported the investigation has extended to several senior figures in the Chinese steel industry, including within the association itself.  lawrenz