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The State Prosecutor's Office yesterday admitted that there were suspicions of criminal acts by municipalities that have withheld employees' salaries.

In a written brief filed with the High Court of Justice yesterday, the state said that according to state prosecution figures, there were suspicions that the monies the state transfered to local authorities to pay workers' salaries and benefits were put to other uses.

Nevertheless, the state said that more information was needed before a decision could be made to open a criminal investigation against local mayors and council heads. The state asked the court to grant it until January 31 to provide a supplementary answer.

The brief also stated that the Education Ministry had also forwarded information about a number of local authorities that may have broken the law and misappropriated funds intended for educational purposes.

The suit was filed by the Histadrut Labor Federation last April against State Prosecutor Eran Shendar, Attorney General Menachem Mazuz and Police Commissioner Moshe Karadi, asking the court to order them to open criminal inquiries over non-payment of salaries and benefits.