The Broadcasting Board of Governors, a federal agency, has asked the state department's inspector general to investigate, a spokesman for Karen Hughes, under-secretary for public diplomacy, told the Financial Times. Mrs Hughes, a board member, was aware of allegations and awaited the findings, he said.

The House of Representatives subcommittee on oversight and investigations is also looking into al-Hurra, which started broadcasting in February 2004. A hearing has been set for November 10 with Kenneth Tomlinson, BBG chairman, and Mouafac Harb, the news director of al-Hurra, called as witnesses.

Al-Hurra - which means "The Free One" in Arabic - is funded by the BBG and has a budget from Congress of $49m for 2005. Based in Virginia, just outside Washington, it was created to counter the perceived anti-American bias of the Qatar-based al-Jazeera. It broadcasts to 22 countries, claiming an audience of 21m people weekly.

Officials declined to elaborate on the precise nature of the allegations but said they involved procurement and contracting. There was also concern that viewing figures might be inflated. Media analysts said al-Hurra's programming had come to reflect the preponderance of Lebanese on the staff, rather than projecting a pan-Arab outlook.

Mr Harb rejected allegations of any wrongdoing. He told the FT he expected the inspector general to look into the whole operation, including programming. He called it a general review into whether al-Hurra was fulfilling its mission.

"There's a campaign against al-Hurra by some people in this city who don't like our dedication to freedom and democracy," he said.