There is, however, no wholesale "collusion" between the the Moro Islamic Liberation Front (MILF) and the military and it was likely that only individual solders were selling weapons to the guerrillas, MILF spokesman Eid Kabalu told AFP.

Some 300 renegade soldiers took over a commercial and residential complex in the financial center of Makati on Sunday.

They booby-trapped the area and demanded that President Gloria Arroyo and other top officials resign for alleged corruption in the military before peacefully surrendering after a tense day-long standoff.

The rebels accused Arroyo's government of selling weapons to the MILF, the communist New People's Army and the Abu Sayyaf kidnap gang in a bid to prolong their insurgencies and get more military and financial aid from the United States.

Weapons previously recovered from rebel camps overran by troops in the south were marked with "DND arsenal", the mutineers said, indicating it came from the Department of National Defense.

The government has denied the accusation, but Arroyo on Monday created a commission to probe the allegation. Top military spy chief Brigadier General Victor Corpuz meanwhile resigned on Wednesday to calm restiveness within the military ranks and ensure that there will be no cover up.

"We understand through our simple inquiry that these firearms come from the (government) arsenal," Kabalu said.

"There's no direct links between the MILF and the AFP (Armed Forces of the Philippines). We do buy firearms and ammunition, not necessarily from the AFP," directly, he said.

He said that in the southern Philippines, where the MILF has been waging its guerrilla war for the past 25 years, weapons are "a prime commodity, very much in demand.

"We do not bother ourselves to determine the source of the materials."

Senate President Franklin Drilon said the body would on Friday investigate allegations by the mutineers, whose ringleaders have been arrested prior to facing court martial.

"We intend to get to the bottom of the soldiers' grievances. Definitely, this will be an independent and non-partisan investigation," he said.

The mutineers also accused top defence officials of masterminding terrorist bombings in the south and blaming it on the MILF in an apparent bid to extract more aid from the United States in the war against terror.

But Kabalu said he had no knowledge that the government was behind any of the recent bombings in the south, reiterating MILF denials they carried out the deadly blasts.

Earlier this month, the MILF and the government agreed to a ceasefire to pave the way for the resumption of formal peace talks in Malaysia on August 4.

It was not clear whether the failed mutiny and the allegations of collusion between the military and the MILF would affect the negotiations.

WAR.WIRE