JAKARTA, March 28 (Reuters) - Indonesia is failing in its efforts to break powerful syndicates responsible for massive illegal logging that is costing the country $4 billion annually, environmental groups said on Wednesday.

The quantity of timber illegally taken from Indonesia's tropical forests is rising again after some successes in 2005 and 2006, said a report published by two conservation groups, the Environmental Investigation Agency and Telapak.

"Despite improved field enforcement against illegal logging since 2005, the authorities have failed to break the powerful syndicates behind the timber theft, a crime costing $4 billion every year," the report said. It did not elaborate on the estimated losses.

It alleged chronic corruption at every level in the Indonesian judiciary had allowed timber bosses, often protected by police and the military, evade prosecution.

Many illegal timber bosses on police wanted lists were tipped off in advance and fled overseas, while those apprehended walked out of courts free, the report added.

"The hard work of field enforcement officers is being squandered by inept police investigations and questionable verdicts by courts," the report said.

EIA is a London-based group, while Telapak is an Indonesian organisation.

Officials from Indonesia's forestry ministry could not immediately be reached for comment.

The report also said it probed networks spanning Malaysia, Singapore and China.

It alleged that money from illegal logging was laundered through banks in Singapore and shipping companies in the city state carried the timber overseas. Traders there would sell the stolen wood on the international market, it added.

Singapore's robust anti-money laundering laws were applied to transactions linked to serious crime or terrorism, but revenue derived from illegal logging appeared to fall outside its scope, the report said.

It said that Malaysia and China were major recipients of stolen timber.

At the height of illegal logging in the late 1990s, Indonesia lost 2.8 million hectares (6.9 million acres) of forests a year, with satellite images showing 60 million hectares of forests in a severely damaged state, the report said.

Experts have warned that Indonesia's forests could be virtually wiped out by 2022, it said.

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