By Waleed Ibrahim

BAGHDAD, Dec 19 (Reuters) - Iraq's Interior Minister vigorously denied on Friday reports that the arrest of several officers was related to a plot to overthrow the government.

"It is a big lie. The public must understand this," Interior Minister Jawad Bolani said at a news conference the day after Baghdad was seized by rumours surrounding the arrest of more than 20 officers from Iraq's interior and defence ministries.

"It was clearly motivated by politics and was not related to security," said Bolani, an independent Shi'ite who is seen as having largely wrested Iraq's strategic Interior Ministry from the grip of militias.

The New York Times reported on Thursday that a spate of arrests of ministry officials was linked to suspected attempts to reconstitute Saddam Hussein's banned Baath party and that some of those arrested were believed to be plotting a coup.

The report sent shockwaves around Baghdad, where politicians are gearing up for provincial elections in January and struggling to find political unity after more than five years of war.

On Thursday, an Interior Ministry spokesman said the 23 arrested officers were under suspicion of being part of the al-Awda ("Return") party, seen as a new incarnation of the once omnipotent Baath party outlawed after the U.S-led invasion. Defence Ministry officials also were detained, the office of the general commander said.

Links to the Baath party are still poisonous in Iraq even though the government has taken tentative steps to reverse some U.S-mandated purges of Baathist officials from government.

Other officials said the arrests were related to corruption or suggested they were driven by manoeuvering ahead of the Jan. 31 vote, which may alter Iraq's delicate balance of power.

An Interior Ministry official, speaking on condition of anonymity, said on Friday night that all of the officers arrested had been released.

Still, the affair raised questions about fissures within Maliki's fragile coalition government, including Shi'ites, Sunni Arabs and Kurds who still sometimes trade barely veiled jabs.

It also brings up doubts about rule of law in Iraq, where U.S. officials say arrests are often politically motivated.

Maliki is staring down rival Shi'ites and other parties ahead of the elections, which may set the tone for general elections in late 2009.

Bolani, an independent Shi'ite appointed by Maliki, recently founded his own political grouping, the Constitutional Party, which would be a competitor against Maliki's Dawa party.

The New York Times reported the arrests were carried out by an elite counterterrorism force reporting to Maliki's office. But the Interior Ministry spokesman, Major-General Abdul Karim Khalaf, said on Thursday they were made by ministry officials. Bolani did not address this question in the news conference.

"I do not rule out that 'outside hands' were involved in this case," Bolani said.

"The Interior Ministry stopped influence of some political parties who used to interfere in the affairs (of government). That success does not suit those parties," he said.

During Iraq's short history as a nation, military coups have brought leaders to power at least three times. (Writing by Missy Ryan; editing by Michael Roddy)

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