The Australian government-owned "Airservices Australia" company said it regrets making more than 1.52 million US dollars in irregular payments in Solomon Islands, as requested by government officials who were also given cash advances on company credit cards.
Airservices Australia provides air traffic control services for aircraft flying over the Solomons.
The company spokesman Terry O'Connor said it regretted the payments made between 1999 and 2003 to a number of third parties, nominated by senior Solomons government officials.
The fees collected from airlines are forwarded to a specified Solomon Islands government bank account.
At the request of government officials however, Airservices agreed to transfer about a fifth of these payments to third parties, including individuals and other government bank accounts.
The Australian Newspaper reports the Solomons Auditor-General as saying Honiara may take legal action against Australia as a result.