The money was routed to Johnny Chung, a southern California businessman and a Democratic fund raiser, through a Chinese woman lieutenant colonel Liu Chao-Ying, an aerospace executive, The New York Times reported quoting officials and lawyers.

Chung said Liu told him the source of the money was the Chinese People's Liberation Army. At one fund-raiser to which Chung gained admission for her, she was photographed along with US President Clinton.

A special adviser to the White House counsel, Jim Kennedy, said "we had no knowledge about the source of Chung's money or the background of his guest. In hindsight, it was clearly not appropriate for Chung to bring her to see the President."Chung's disclosure comes at a very embarrassing time when Clinton is making preparations to go to China in June to establish a "strategic relationship" with the country and lift most or all of the Tiananmen Square sanctions and pave the way for high tech exports to China.

Under the American law, foreign governments are prohibited from contributing to political campaigns. The hunt for the Chinese connection by federal investigators began after US intelligence intercepted telephone conversations suggesting that Beijing considered covertly funding the campaign of President Clinton, who they felt would be more friendly to China than his opponent, Republican Bob Dole.

At the time the People's Liberation Army gave money to the Clinton campaign, President Clinton was making it easier for American civilian communication satellites to be launched by Chinese rockets, a key issue for the Chinese army and for Liu's company, which sells missiles to the military, The NewYork Times said.Meanwhile, the US senatehas passed an amendment barring entry of goods made from forced child labour into the country.

The senate passed an amendment to the defence authorisation bill yesterday making permanent the current temporary provision authorising customs to ban any goods made with forced child labour from entering the country.