A law passed at the end of July stripped the National Anti-Corruption Agency (NABU) and the Specialised Anti-Corruption Prosecutor's Office (SAP) of their independence and placed them under the supervision of the Prosecutor General, himself appointed by the head of state.

President Volodymyr Zelensky on Thursday backtracked and restored the bodies' independence following an outcry from the country's allies and the first anti-government street demonstrations since the Russian invasion in 2022.

The NABU said on Saturday that it and the SAP had exposed "a scheme for the systematic misappropriation of budget funds allocated by local authorities for the needs of the defence forces, as well as the receipt and provision of unlawful benefits on an especially large scale".

It said the scheme involved inflating prices for electronic warfare and drone equipment, and then funnelling off 30 percent of the contract amounts.

The suspects include a member of parliament, heads of district and city administrations, members of the National Guard, and executives at defence companies.

The NABU said it has made four arrests so far but did not identify those detained.

The interior ministry said it had suspended the suspected members of the National Guard.

Zelensky said in a statement: "I am grateful to the anti-corruption agencies for their work.

"It is important that anti-corruption institutions operate independently, and the law passed on Thursday guarantees them all the tools necessary for a real fight against corruption."

The president initially said he needed to bring the NABU and the SAP under his control because they were inefficient and under "Russian influence". But he did an about-face when confronted with the outcry -- first serious political crisis since he took office six years ago.

Several cases of corruption -- an endemic problem in the country -- have been exposed within the armed forces and the defence ministry during the war with Russia.

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SAP