Iraq has suspended the licence of a US-government funded broadcaster after it ran an investigation alleging corruption within the country's religious institutions.

The country's media regulator on Monday shut down the local offices of Al Hurra television - a broadcaster funded by the US Agency for Global Media - for three months, accusing the network of bias and defamation in their report.

"The program failed to uphold the principles of media professionalism," a statement from the Communications and Media Commission (CMC) said, accusing the reporters of using anonymous sources to defame and to cause moral injury.

The investigative report, which aired last week, alleged corruption within the Sunni and Shia Muslim endowments - state bodies that administer religious sites and real estate - including foundations linked to Iraq's top Shia cleric Grand Ayatollah Ali al-Sistani.

The Sunni endowment denied the allegations in the report and said they would take legal steps against the channel. The Shia endowment could not immediately be reached for comment.

In addition to the three-month suspension, Al Hurra must stop all activities until "they correct their position" and must issue a formal apology, the CMC decision said.

Al Hurra said it would issue a statement shortly.

Neither the US Department of State nor the US Embassy in Baghdad oversees the content of Al Hurra's programming, Embassy Spokesperson Pedro Martin said.

"Alhurra's mission is to deliver accurate and objective information on the region, American policies and Americana," he said. "The Government of Iraq has the right to question Al Hurra on any reporting that is perceived to be false or unprofessional and has the right to respond with their position." 

* This story was edited by Ahram Online.