updated 6/22/2009 7:21:28 AM ET 2009-06-22T11:21:28

Police said Monday that an e-mail challenging Prime Minister Kevin Rudd's honesty in his 19-month-old government's biggest political crisis appeared to be a forgery.

The finding greatly relieves pressure on Rudd, whose government has been accused of providing favors for political friends.

The police investigation began over the weekend, when newspapers published an e-mail purported to be from a Rudd adviser asking a Treasury official to give priority to a credit application by the prime minister's friend, car dealer John Grant.

Opposition lawmakers said the e-mail was proof that Rudd misled Parliament when he said his office did not help Grant in his quest for a government loan.

Detectives on Monday examined computers at Treasury offices and at the Canberra home of the Treasury official, Godwin Grech, who manages a government fund established to help financially distressed car dealers, police said in a statement.

Grech claimed last week that the prime minister's office had first drawn his attention to Grant's application for credit from the 2 billion Australian dollar ($1.6 billion) fund.

Rudd and Treasurer Wayne Swan denied that was true.

Grech told a Senate inquiry on Friday that he was first alerted to Grant's case by an e-mail from Rudd's office, but he said he could find no record of that e-mail and conceded that his recollection could be wrong.

Fraud investigation
On Saturday, News Corp. newspapers in Australia published the e-mail, which the government called a fake. The government asked police to mount a fraud investigation.

"Preliminary results of those forensic examinations indicate that the e-mail referred to at the center of the investigation has been created by a person or persons other than the purported author of the e-mail," Monday's police statement said.

Police questioning of a 42-year-old man "is consistent with preliminary forensic advice," the statement said. The man was not identified in the statement but was believed to be Grech.

Police made no further comment because the investigation was continuing, the statement said. Grech could not be contacted Monday.

Government lawmakers cited the police findings in Parliament on Monday, arguing that opposition Leader Malcolm Turnbull should resign for relying on a forgery to attack the prime minister.

The opposition shifted its attack on Monday to Swan, who says he did not give Grant's application special treatment.

Grant, who gave Rudd a secondhand pickup truck to use for campaigning and once sold Swan a car, has not been granted a loan from the government fund.

More on: Australia

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