Abuja - A Nigerian court on Friday ordered that lawmaker Farouk Lawan be held without bail following a charge that he solicited a $3 million bribe from an oil baron while probing corruption in the oil industry.

The Lawan affair became front-page news in Nigeria when the story emerged last year.

Lawan, once known as a graft-busting legislator, pleaded not guilty to the charge that he demanded a bribe from Femi Otedola, head of Zenon Oil and Gas, in exchange for removing the firm's name from a damning final report.

Last year, Lawan led a parliamentary committee which uncovered $6.8 billion (5.0 billion euros) of lost revenue between 2009 and 2011 in Nigeria's fraud-ridden fuel subsidy programme.

Co-defendant Boniface Emanalo, the secretary of the committee who is accused of receiving $120,000 from Otedola, was also remanded after pleading not guilty.

Prosecutor Adegboyega Awomolo argued that the defendants should be held on remand because “they have not indicated to the court that they will not go back and commit the same crime again while on bail.”

High Court Judge Mudashiru Oniyangi denied bail pending review of their application, with the next hearing set for February 8.

A private news network, Channels, has broadcast recordings it said were of Lawan soliciting a bribe from Otedola to remove Zenon from the list of companies implicated in the subsidy fraud.

One leading newspaper, This Day, claimed Lawan even stuffed some of the bribe cash under his hat when his pockets overflowed.

Otedola has not denied the authenticity of the recordings and has said little in public, but he has indicated that he began cooperating with the security services once Lawan approached him about the bribe.

The allegations against Lawan came as a heavy blow to anti-graft activists, who once saw him as an ally close to Nigeria's widely criticised federal government.

The Lawan probe was launched after an unprecedented wave of strikes last year sparked by the government's attempt to scrap a subsidy programme aimed to keep pump prices low. Many Nigerians see subsidies as their only benefit from the nation's oil wealth.

The strikes forced the government to partially reinstate the subsidy programme. - Sapa-AFP