Updated 7.25pm - Added Dalli statement

The Prime Minister said he had full faith in the Maltese authorities, shortly after a damning New York Times report said the police had still not acted to an OLAF report linking former EU Commissioner John Dalli to a Ponzi-like scheme last year.

The EU's anti-fraud office OLAF presented its Bahamas investigation to the Attorney General in 2016 but the police said investigations were still ongoing, according to the newspaper. 

The EU investigators were said to have linked the former Maltese minister to a Ponzi-like scheme that duped investors of at least $1.5 million.

"The investigators presented their conclusions in a damning report to the authorities in Malta last summer, according to interviews with people involved in the case and to records obtained by The New York Times," the newspaper said.

But nothing appears to have been done, underscoring what experts say is a major flaw in European Union governance. Even when Brussels suspects wrongdoing by officials, staff members often can do very little about it, because enforcement is largely up to the member nations, the influential paper said.

Investigators allege that Mr Dalli had travelled to the Bahamas in 2012 in connection with a scheme led by an American who lives in Malta.

READ: Dalli flew to the Bahamas after being alerted to EU probe

In a statement, Attorney General Peter Grech said his office would refer the findings to the police if there were "the possibility of criminally sanctionable conduct," but he declined to discuss Mr Dalli's case.

They use connections they have in the media, including hate bloggers in Malta and journalists of newspapers like the New York Times in Brussels to spin stories

Asked during a news conference if he had full faith in the AG after no prosecution charges were filed against Mr Dalli, Joseph Muscat said: "The AG is a man chosen by my predecessor and he is definitely a man of great integrity. The AG had not hesitated to prosecute against Cyrus Engerer for instance... There is, and has never been, any interference by this administration."

Mr Dalli hit back this morning by saying that the judicial process involving OLAF's director-general Giovanni Kessler and Swedish Match against whom he lodged a report for defamation and abuse of power started yesterday. 

In a letter to the media, he said the case was adjourned after his lawyer filed a petition for the country to order the examining judge in Brussels to "perform supplementary duties", that is to intensify his investigation. 

The New York Times story today.

The former minister said the European Commission's obstruction of the investigation by not granting the immunity of OLAF staff and only partially lifting the immunity of Mr Kessler has prevented the Belgian police from investigating. 

He accused the OLAF chief of abuse of power and disregard to his own office's policies. 

Mr Dalli, who was sacked as European Commissioner in October 2012 amid the Swedish snus scandal, hit out at critics: "They use connections they have in the media, including hate bloggers in Malta and journalists of newspapers like the New York Times in Brussels to spin stories that they leak to them."

'Splurge of odium'

In a second statement issued at 7.15pm, Mr Dalli said he had written to the president of the European Commission requesting action against what he termed Mr Kessler's "splurge of odium."

He said the NYT article was "nothing but a rehash" of blog posts published by a "Maltese blogger", in an indirect reference to Daphne Caruana Galizia, and suggested the Mr Kessler and Ms Caruana Galizia were complicit in fabricating claims against him.

Mr Dalli said that his daughters "were simply a service provider" in the alleged fraud and had also lost money in the scheme - "a far cry from being part of any fraud."