NAIROBI (AFP) - Stung by fresh graft allegations, the Kenyan government on Wednesday conceded setbacks in its war against systemic corruption in the country even though it has passed laws to combat the vice.

Justice Minister Martha Karua said the authorities failed to implement recommendations from several task forces that were created to stop corruption which has soured relations between Nairobi and the donors.

"So long as we have pending corruption cases arising out of all the transactions that have been cited in investigation reports, the perception of our society and of our friends will be that Kenya is still tolerating corruption," she said in Nairobi.

Officials have blamed the judiciary for the setbacks, citing corruption cases that have dragged on for nearly two decades without any indication of their conclusion. Others say the government is unwilling to crack down on graft.

Karua, who is legally bound to lead the anti-graft war, spoke a week after finance minister Amos Kimunya resigned from the government over suspicion of corruption in the sale of a luxury Nairobi hotel.

Since President Mwai Kibaki came to power in 2002, several anti-graft laws have been enacted but the new legislation has failed to stem the tide that nearly grounded the country's economy in the 1990s.

Kenya's two main corruption scandals -- worth more than a billion dollars -- are yet to be resolved despite pressure from the public and donors, many of whom fund the country's development.

The 1997 Anglo Leasing scandal, which involved the payment of more than 250 million dollars in government funds to spurious firms for high-tech passports and police forensics labs, is yet to be resolved and the status of the fate of the money yet to be known.

Another outstanding scandal is the "Goldenberg Affair" that involved siphoning off around one billion dollars from the Central Bank of Kenya in 1993 under a compensation scheme for the export of non-existent gold and diamonds.

Kibaki came to power in December 2002 with a pledge to stamp out corruption and restore confidence in public institutions, but his government has been plagued by numerous graft allegations and including poll fraud in last December's general election.

LIKE IT?  LET OTHERS KNOW