The panel, presided over by Judge Zeljko Horvatovic, rejected bail offered by the defence and ordered that Miletic, who so far has been defending himself without being detained, be placed in custody.

Miletic's attorney Ljubo Pavasovic Viskovic said he would appeal the detention order.

There is no possibility of appeal against the court decision confirming the indictment which charges 43-year-old Polancec with abuse of powers and 54-year-old Miletic with inciting abuse of powers.

The panel of judges adopted the decision after a two-hour session held behind closed doors, which was also attended by the two indictees. This was the first time Polancec left Zagreb's Remetinec Prison, where he was placed in custody in late March this year.

Polancec's attorney Anto Nobilo said the proceedings against his client were politically motivated, and Pavasovic Viskovic said there were no criminal elements in the case.

Now that the indictment has been confirmed, the case will be taken over by a trial chamber which is to schedule a pre-trial hearing and set a date for the start of the trial.

The proceedings against Polancec and Miletic are being conducted in line with the Law on Criminal Procedure which took effect last year and under which a panel of judges decides on whether an USKOK indictment is founded or not and has the power to confirm or reject it.

Under USKOK's indictment, in 2008 Polancec agreed with Miletic the making of a legal study entitled "Convalidation of years of service and pensions acquired in the territory of the Republic of Croatia under the administration and mandate of the United Nations in the period from 3 December 1991 to 15 January 1998."

Miletic made the study which the Ministry of Economy, Labour and Enterprise never used, but for which it paid half a million kuna.

USKOK alleges that the former minister commissioned the study and paid for it even though he knew that it was not necessary since the issue in question had already been solved at talks between government bodies and Serb workers of the Borovo footwear factory from Vukovar. Polancec took part in those talks, while Miletic, according to the press, represented a group of Borovo workers and was paid by Borovo HRK 1.3 million for his services in January 2009.

Polancec's attorney Nobilo said that he would move that Vojislav Stanimirovic, leader of the Independent Democratic Serb Party (SDSS), who also participated in the talks, testify in the trial. Nobilo said that negotiations with Borovo employees were a "first-class political problem" and that Polancec and Miletic deserved credit for its settlement.

The defence is not denying that the study made by Miletic was not worth HRK 500,000, but is claiming that Miletic earned the amount in question for his services provided in the course of negotiations with Borovo employees.

Nobilo said that he had not proposed that former Prime Minister Ivo Sanader should be called to the witness stand because it was not necessary for the time being "in this case."

The indictment recommends confiscation of the money illegally acquired by Miletic.

Apart from this case, USKOK has indicted Polancec also for illegally spending HRK 230,000 to instal lighting on a football field in his hometown of Djelekovec near Koprivnica.

Also under way are two more investigations against the former economy minister - one in a case concerning the food company Podravka and the other in a case concerning the power supplier HEP.