SYDNEY, Sept 23 (AFP) - A potentially explosive device has been found in the cargo hold of a jet of Australian domestic airline Virgin Blue, a report said Thursday.
Australian Federal Police confirmed that an investigation was underway into a Virgin Blue flight on Monday.
In its report, The Daily Telegraph newspaper said baggage-handlers discovered the device in a knotted plastic bag, along with matches, in the cargo hold of a Virgin Blue 737-300 jet at 11:30 am (0130 GMT) on Monday.
An initial police report concluded the substance was thermite, a chemical used in grenades, the newspaper said.
It was found wrapped in a cardboard toilet roll tube with a firework sparkler attached as a 30-second fuse, it said. The newspaper said the discovery was kept quiet while the federal police attempted to trace its origin.
The package was found lying loose in the baggage hold before a flight from Sydney to the town of Maroochydore in Queensland state, it said. Investigators had not ruled out the possibility it was planted by a disgruntled airport or aircraft worker.
An airline spokesman quoted by the newspaper declined to comment on the precise substance, but confirmed it was "a flammable substance, powder and matches".
The report follows the bombing of Australia`s Jakarta embassy earlier this month, and comes amid fears of another terrorist attack ahead of an October 9 general election.
Virgin Blue was set up in 2001 as a low-cost carrier following the collapse of Australian domestic airline Ansett.
Australia is widely seen as among the top targets of Islamic extremists due to Prime Minister John Howard`s strong support of last year`s US-led invasion of Iraq. However, to date no successful terrorist attack has been carried out on Australian soil.