Australian PM says police will investigate car dealer claims

Australian Prime Minister Kevin Rudd on Saturday said police had been called in over accusations he misled parliament and sought special government treatment for a car-dealer friend.

Rudd said the Australian Federal Police (AFP) would investigate an email at the centre of the row, which purported to come from a public official. The government says it does not believe the email is genuine.

"Impersonating a public official in the performance of their public functions is an extremely serious offence," Rudd told reporters. "Which is why the secretary of the attorney general's department has today referred the matter of this alleged fake email to the Australian Federal Police.'

The government has said the conservative opposition, which on Friday called for Rudd's resignation over the affair, has questions to answer over the email, but opposition leader Malcolm Turnbull has denied the opposition was behind it.

The controversy comes at the mid-point of Rudd's three-year term in office, just as the government is struggling to drive legislation through a hostile upper house of parliament and amid speculation that Rudd might want an early election.

The row stems from Rudd's friendship with a Queensland state car dealer and accusations that he asked Treasury officials to help the man's company gain access to a government programme.

The political row is the first to engulf Rudd personally since he won office in late 2007, and comes two weeks after the resignation of the defence minister over accusations that his office helped arrange meetings for his brother with defence officials.

However, Rudd remains well ahead in opinion polls, despite the slowing economy and political setbacks as he battles to push his programme, including plans for an emissions trading scheme, through an opposition-dominated Senate.

Rudd would normally face an election in late 2010, but may have a trigger to go in December this year or early 2010 if the Senate continues to reject his carbon trade plan.

Rudd has previously told parliament his office did not ask Treasury officials to help the car dealer access to the OzCar scheme, which was set up to help struggling dealers find finance during the global economic crisis.