Greek Prime Minister Georges Papandreou said Athens will put procedures in place to ensure German telecoms giant Siemens compensates the country over a massive bribes scandal.

Papandreou told a cabinet meeting Greece would seek "damages for wrongs due to fraudulent practices," a statement released by his office said.

A parliamentary commission set up to investigate the allegations reported last week that Athens should seek two billion euros in damages over the affair.

Greece will "launch the procedures to impose fines for violation of the rules of transparency" and "investigate violations of competition rule," Papandreou said.

He said the state would ensure that joint ventures such as state telecoms operator OTE would also seek damages with interest, and would itself "re-examine" existing contracts with the German company.

Siemens officials are accused of bribing local politicians and senior officials at OTE to bag a multi-million-euro contract before the Athens 2004 Olympic Games.

The parliamentary report named 15 ministers or former ministers from Greece's two biggest parties who oversaw the granting of lucrative contracts in the late 1990s or early 2000s.

But the lawmakers from the ruling socialists (PASOK) and the main opposition conservatives New Democracy (ND) have been unable to agree on a common list of suspects, prompting media scorn.

Papandreou's socialists have vowed to clean up corruption but no Greek officials have yet been prosecuted and three Siemens executives implicated in the affair have fled the country.

Siemens paid out 1.3 billion euros ($1.8 billion) in bribes to foreign officials in exchange for landing lucrative contracts between 2000 and 2006, making it the biggest scandal in corporate German history.

In Greece, the company handed out some 100 million euros in kickbacks according to German press reports.