THE Papua New Guinea (PNG) Government baulked at paying an 'outrageous' commission sought by Jardine Fleming to advise on the acquisition of mining giant RTZ-CRA's stake in a company at the centre of an investigation into the abortive hiring of mercenaries, it has been revealed. Chris Haiveta, the deputy prime minister of PNG, said government officials suggested he reject Jardine's payment proposal for advising on a plan to buy 53.6 per cent in Bougainville Copper Ltd (BCL), which owned the Paguna copper and gold mine. The mine was abandoned in 1989 after political insurgency on Bougainville forced the evacuation of staff. Government plans earlier this year to hire mercenaries for an invasion of the island collapsed, triggering a constitutional crisis. Mr Haiveta, who was giving evidence before a commission of inquiry, said he chose Jardine Fleming because he was impressed with its work last year in the sale of stock in Orogen Minerals, the privatised division of Papua New Guinea's Mineral Resources. But concerns arose when Jardine, which had accepted an offer to be financial adviser on the project, recommended that it be paid a commission rather than a one-off fee. Jim Lamont, an adviser on economic policy for the PNG finance department, wrote a memo to the minister recommending a renegotiation of the payment which was to be based on a percentage figure of the number of shares acquired by the government multiplied by the average of the share price over a three-month period. Mr Lamont's memo stated: 'In my view, this is outrageous for what apart from the legals is a quite simple and straight forward transaction which boils down to little more than haggling the price and under some circumstances, it might be possible to conclude the negotiation elements in a day or two's work.' Jardine officials allegedly codenamed the project 'Operation Valentine' and began negotiating the terms of a letter of mandate in Hong Kong on February 14. The codename was later changed to 'Project Beacon'. The contract was never completed as events were overtaken by the collapse of the mercenary raid on Bougainville. Mr Haiveta told the inquiry that the negotiations for the RTZ-CRA stake and the mercenary contract were 'different projects'. Jardine has launched a separate inquiry into the events and has employed lawyers to attend the Port Moresby hearing. A spokesman for the company was contacted last night but declined to comment. The hearing continues.