TAIPEI, TAIWAN - THE family of Taiwan's former president Chen Shui-bian on Wednesday agreed to send back here the 700 million Taiwan dollars (S$31.8 million) found in their Swiss bank accounts, prosecutors said.

The twist marked another development in the ongoing investigation into the money laundering allegations implicating the former leader and his family.

To help the probe, 'Chen Chih-Chung (Chen's son) and his wife (Huang Jui-chin) have agreed ...to remit the money now in the three Swiss bank accounts into a local bank account designated by the prosecutors,' the spokesman told reporters.

The scandal surfaced in mid-August when the ex-president admitted his wife had wired US$20 million (S$30 million) abroad from his past campaign funds but said she had done so without his knowledge. He has denied embezzling money from the government.

Since then the funds in the three Swiss bank accounts belonging to Huang have been frozen.

Chen's son and his wife have said they were not aware of the source of the funds and were only following the orders of Wu.

However, the Koo family admitted for the first time earlier this month that they had paid Chen hundreds of millions of Taiwan dollars in kickbacks, in exchange for the government's purchase of land at a price that was above market value.

Prosecutors had raided three companies, including the Koo family's Chinatrust, over their suspected roles in transactions to the Chen family's overseas accounts.

Chen, implicated in several scandals during his eight years in power, was arrested on November 11, accused of money laundering, embezzling government funds, taking bribes and forging documents.

The former president, accused of graft during his time in office, was locked up the next day after a court approved a bid by prosecutors to take him into custody, officials said.

Chen, who retired in May, is accused of embezzling 14.8 million Taiwan dollars from the government while he was president.

But the pro-independence Chen had claimed that he was victimised in what he alleged is the witch hunt of the China-friendly Kuomintang (KMT) government.