Susanne Osthoff, a 43-year-old German archaeologist who became an aid worker, was kidnapped with her Iraqi driver by a mysterious group calling itself Storm Troopers of the Earthquake near Baghdad on 25 November last year.
The incident was given widespread publicity in Germany. A videotape released by the kidnappers showed Ms Osthoff and her driver blindfolded while a hostage-taker brandished a gun.
Negotiations between German officials and the kidnappers led to Ms Osthoff being freed on 18 December. She was taken to the German embassy in Baghdad.
But yesterday several German newspapers quoted unnamed embassy staff and German intelligence agents as saying that they found $4,000 (£2,200) of the ransom money in Ms Osthoff's clothing while she took a shower.
The reports said German intelligence officers had checked the serial numbers and found that they tallied with the numbers on the ransom money.
Growing suspicions that Ms Osthoff collaborated with her kidnappers for financial gain prompted some German MPs and security experts to demand an inquiry.
But unnamed foreign ministry and German intelligence officials said suggestions that Ms Osthoff had pocketed the cash were "completely dishonourable".
Ms Osthoff, it appeared, had been given $4,000 by the hostage-takers to compensate for $3,000 they stole from her when she was kidnapped. The additional $1,000 was compensation for the "rough treatment" she suffered. The unnamed German officials said Ms Osthoff made no attempt to hide the cash and had explained immediately how she came by the money.
Unconfirmed German media reports said the amount paid to secure Ms Osthoff's release was $5m.
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