In the past three weeks, investigators have seen signs of large sums of money moving from Iraqi government-controlled accounts to private accounts in the Middle East, the Post said.

"People with connections are trying to loot what they can," said a private investigator, speaking to the Washington daily on condition of anonymity.

The 1.2 billion dollars are in addition to 1.7 billion dollars in Iraqi government funds frozen in US banks after Iraq's 1990 invasion of Kuwait, and are now being repatriated, a Treasury Department official told the Post.

Estimates of Saddam Hussein's family wealth range between two and ten billion dollars.

US investigators trying to track down the Iraqi leader's ill-gotten gains are hoping to find documents in Baghdad that will enable them to come up with a more precise figure, the Post said.

The US government has estimated that Saddam's regime raised more than six billion dollars between 1997 and 2001 from illegal sales of oil that circumvented the United Nations' "oil-for-food" programme.

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