Johannesburg  - German shipbuilding giant MAN Ferrostaal warned that the allegations of bribery levelled at it by a South African newspaper in connection with a multi-billion-dollar state arms deal could "endanger the creation of thousands of jobs" by scaring off partners in an offset project.

In a press release sent to Deutsche Presse-Agentur dpa in Johannesburg, Ferrostaal refers to a letter sent by board member Klaus Lesker to the editor-in-chief of the Sunday Times, in which he warns the Times that is was putting jobs at risk by alleging the company had paid President Thabo Mbeki a bribe.

"MAN Ferrostaal has warned the Sunday Times that their false allegations of bribery are damaging to current negotiations for the construction of oil and gas platforms in the company's offset projects in Saldanha Bay (Western Cape province) and Cape Town. This might endanger the creation of thousands of jobs," MAN said.

"International companies react very sensitively to bribery allegations and I am concerned that your false allegations might have a negative impact on these negotiations," Lesker told Times' editor Mondli Makhanya according to the statement.

"Your false allegations in the Sunday Times articles from August 3 and August 10, not only put the creation of jobs at risk, but also jeopardizes the return of a promising industry to SA," Lesker was further quoted as saying.

In its August 3 front-cover story the weekly alleged Mbeki had taken a 30-million-rand (3.9-million-dollar) bribe from MAN in return for a deal to supply the South African Navy with three submarines.

The Times quoted an investigation carried out by an unnamed consulting firm in Britain working for an unnamed Central European manufacturer, which claimed Ferrostaal paid to receive the contract. The paper alleged Mbeki had given 28 million rand to his African National Congress party and 2 million rand to ANC leader Jacob Zuma.

Mbeki's office flatly denied the allegation. Public Enterprises Alec Erwin, in a later radio interview, said "no donations to any political party were in any way part of the contracting process."

The offset projects MAN refers to are investments that companies given contracts under the arms deal were requested to make in key industrial sectors targeted by the South African government for job creation.

The offset projects have fallen far short of expectations in terms of investment and jobs.

The Times had accused MAN of failing to meet its promises on a call centre, a condom factory and a stainless-steel mill project.

Defending its investments MAN claimed it had met 80 per cent of its offset requirements and invested heavily in South Africa's economy.

"Together with partners we have arranged, and we are in the process of arranging investments totalling several billions of rand, creating and retaining several thousands of jobs," MAN said it told Makhanya in the letter.

MAN also charged that the secret report, on which the Times has based its story and which MAN said it had seen, was "full of mistakes, inaccuracies and omissions" and warned it was considering legal action."

The Times editor was not available for comment Monday but the paper has steadfastly stood by the story. (dpa)