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The Indonesian Government is poised to cancel buying nine Lockheed Martin F-16A/Bs, originally ordered by Pakistan, in an effort to distance itself from the growing scandal surrounding foreign financial donations to US President Clinton's re-election campaign.

According to informed sources, President Suharto is keen to distance Indonesia from the growing US political controversy by scraping the $160 million deal. The Indonesia authorities want to avoid any suggestions being made that might link US Government support for the F-16 sale with Democratic Party fund raising.

Democratic fund raisers have admitted to receiving donations from the Indonesian Lippo Group, which is closely connected to Suharto and the Government in Jakarta. The discovery of foreign donations being made to the Democratic Party, in particular from Asian interests, has led to allegations of influencing buying.

Clinton has been closely associated with the deal, since writing a supporting letter to his Indonesian counterpart in 1996. Washington has been keen to find buyers for the 28 stored F-16s, to placate Pakistani demands for its $658 million outlay to be refunded. Delivery has been embargoed over US allegations that Pakistan is developing nuclear weapons .

A deal with Indonesia was struck in August 1996, but US Congressional concern over Jakarta's human-rights record forced the Clinton Administration to postpone the start of notification and approval until January.

The proposed sale continues to face opposition from Congress and has not been submitted. It is understood that Jakarta has been told that notification would again be delayed until after the Indonesian general election in June. Officials, however, now fear the deal will be even more closely scrutinised in the wake of the Lippo affair.