He estimated that 15 per cent, $10 million, of aid transferred in this way had been lost. "It is not acceptable," he added.

A UN spokesman in Yangon told the Daily Telegraph that the exact losses are still being calculated. Observers believe the final figure could be higher, because for much of the period since the cyclone the discrepancy in exchange rates has been around 25 per cent.

The scandal was exposed in an investigation by Inter City Press, a New York blog, which began reporting the story June 26 after receiving a leak of purported minutes from a teleconference in which officials registered alarm at a "very serious 20-per-cent loss on foreign exchange."

Yet top officials denied that such losses were occurring, even as they launched an appeal for another $300 million in cyclone aid July 10.

Discrepancies between the official and market exchange rates are well known to visitors to Myanmar. The International Monetary Fund highlighted the issue in a report last year.

In Washington, U.S. President George W. Bush renewed a ban on imports from Myanmar and also signed a new law that aims to keep Myanmar's gems from entering U.S. markets via third-party countries.

The ban was first imposed in 2003 over the suppression of opposition leader Aung San Suu Kyi's democracy movement.