The Australian construction company Leighton Holdings is at the centre of explosive allegations about bribery, corruption and cover-ups in Iraq.

Fairfax media claims internal company documents show former chief executive Wal King approved millions of dollars worth of kick-backs to win construction contracts in Iraq.

The allegations come as the Reserve Bank confronts claims that its subsidiary Note Printing Australia tried to strike a deal an illegal deal with Iraq in 1998.

Fairfax Media has obtained hundreds of confidential documents that expose plans to allegedly pay multi-million dollar kickbacks to win contracts in Iraq, Indonesia and Malaysia

The six-month investigation has also uncovered what it says is a handwritten memo from November 2010 from Leighton's acting CEO David Stewart.

The note claims his predecessor Mr King knew a $42 million payment was made to a company in Monaco which had been nominated by Iraqi officials who had selected Leighton for a $750 million oil pipeline contract.

In the memo,  Mr Stewart says Mr King approved the payment.

The Australian Securities and Investments Commission (ASIC) says the reports are a matter for the Australian Federal Police.

ASIC says such activity is governed by the Commonwealth Criminal Code and the AFP has carriage of the matter.

The Australian Federal Police is yet to comment on the allegations.