A criminal investigation has opened against the head of the Federal Civil Aviation Office, Raymond Cron, for unauthorised payments to staff in his former job.
Cron has admitted paying SFr180,000 ($136,420) in bonuses to staff under him without telling his superiors.
The probe follows a complaint in mid-October by the Batigroup construction concern of Basel against an employee in its finance department.
He is said to have committed offences involving several hundreds of thousands of francs and is now in detention, according to company spokesman Thomas Staffelbach.
The public prosecutor of canton Basel City widened the inquiry to include other persons, including Cron.
At a meeting with journalists on Monday, Cron and his lawyer explained the background to the affair.
"I have invited you here today to talk about a mistake I made during my previous activities."
Cron said that during a period "of very hard work" he made unauthorised payments to seven of his subordinates who had shown exceptional commitment.
The money included funds that came into the Batigroup but were not booked in the firm's accounts and two bills paid to the firm erroneously.
He recognised that he had "committed a grave error" in wanting "to try to find a pragmatic and efficient solution to a problem".
"I knew that I was contravening an internal regulation but I did not think I was breaking the law."
"The money went exclusively to the staff concerned apart from about SFr4,000 which remained in my hands," he said.
Since then, Cron has paid back the money to the Batigroup through his lawyer and apologised to the company's director.
Cron said he was extremely sorry for what he had done and was ready to accept the consequences.
He added that he had informed his current boss, Swiss Transport Minister Moritz Leuenberger, who had "expressed his confidence" in him.
He therefore intended to continue working for the interests of the aviation office with full commitment .
Asked about a possible resignation, Cron repeated that there was no link between "the error" and his current activities.
In a statement, the transport ministry said that Cron's behaviour had "never given rise to any reproach". On the contrary, he had been appreciated by parliament and had received praise for his handling of the delicate dossier of Zurich airport.
But it added that Cron's behaviour was to be condemned and he had failed in his obligations.
The former director of the federal office, André Auer, was forced to leave his post in August 2003 after a report highlighted aviation security problems.
swissinfo with agencies
Raymond Cron became head of the Federal Civil Aviation Office in May 2004.
Between January 2002 and July 2003 he admits having paid SFr180,000 in bonuses to seven people under him without telling his employer.
A criminal investigation has opened against him.
While waiting for judicial authorities to study the case in detail, Transport Minister Moritz Leuenberger says he has every confidence in Cron.