BAGHDAD, Jan 3 (Reuters) - Iraq announced plans on Thursday to post details of government contracts and spending on the Internet in a bid to fight corruption that has undermined peace efforts, hit state coffers and hurt government credibility.

By publishing the details of public spending -- such as project tenders and procurement -- on the Internet, Iraq's government hopes to increase transparency and reduce the risk that funds could be misused.

Launching the "e-government" initiative, Deputy Prime Minister Barham Saleh said sectarian politics had helped create corruption by dividing ministries among groups who give patronage to their members.

"Political and sectarian power sharing turns ministries and government institutions into the territory of one group or another," he told a conference on corruption held inside Baghdad's Green Zone government and diplomatic compound.

The conference was attended by cabinet ministers, members of parliament and diplomats.

Saleh said measures to fight the "disease" of corruption had become politicised, with powerful rival factions trying to exert influence over law enforcement.

"If we do not face this firmly and seriously, it will defeat us," he said.

Under the new initiative, he said, government ministries would have to begin sharing all information about the spending of public funds from April 1.

Science and Technology Minister Raed Fahmy would be put in charge of a committee which would have until the end of 2008 to design a system to put all that information on the Internet.

"All ministries and government institutions are to cooperate with this system to put their data and their information into this system to show the movement of public funds, to enable citizens and the media to see this movement," he said. (Reporting by Waleed Ibrahim; Editing by Caroline Drees)

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