Police swooped on the Karmapa's monastery in Dharamshala, a hill station in northern India, on Thursday and returned Friday to question staff about the origins of local and foreign bank notes discovered on the premises.

An aide has been arrested and $600,000 in dollar bills has been discovered as well as currencies from another 25 countries, senior local policeman P.L. Thakur told AFP in Dharamshala.

"The Karmapa has no role in it. The investigations will lead us to a further course of action," Thakur told AFP without elaborating.

The Karmapa fled Tibet as a 14-year-old because he said he was concerned that Beijing would force him to turn against the Dalai Lama, who has acted as a father-like figure for him in Dharamshala.

China regards the Dalai Lama as a dangerous separatist and has sought to groom monks who would accept Tibet as being an integral part of China and drop all claims for an independent state.

In a twist late Friday, India's NDTV news chain reported Indian security officials planned to question the Karmapa over alleged Chinese links, saying the monk was suspected to be planning to set up a string of pro-Chinese monasteries.

The news station said security officials believed the Karmapa's escape as a 14-year-old from China had been "stage managed" by Beijing.

There was no official Indian comment immediately available on the report but Karma Chungyalpa, secretary to the Karmapa, told AFP the allegations were "untrue and fabricated."

The existence of the Tibetan movement in India, which lobbies openly for autonomy or independence and denounces the human rights situation in Tibet, is a constant thorn in the side of relations between the two Asian giants.

The Karmapa is one of the most revered religious figures in his homeland and is seen as one of a handful of candidates who could step forward to lead the community once the charismatic Dalai Lama dies.

He has lived in exile in India since fleeing his homeland in 1999 -- an eight-day journey by foot and horseback across the mountains -- but he remains recognised by China, Tibetans in Tibet and the community in exile in India.

At his Gyotu monastery in the foothills of the towering Himalayas, the 27-year-old Karmapa receives visitors on a regular basis, many of whom leave offerings or donations in cash.

He could never become a Dalai Lama, which is a title given to a child chosen as the reincarnation of the previous version, but he could emerge as the next leader.

The 75-year-old current Dalai Lama has said the institution might be abolished after his death and any choice over his successor is likely to take time and be bitterly contested by Tibetans and the Chinese authorities.

The police acted after two men were stopped earlier in the week in the northern state of Himachal Pradesh carrying 10 million rupees ($219,000) that they said belonged to one of the trustees of the monastery.

The trustee, identified as Rabgay Chosang, is thought to have been involved in a land deal, police said, adding he had been arrested and remained in police custody.

A source in the monastery, who asked not to be named, said 15-20 police were present on Friday and that they had seized "a few things". The Karmapa was in his residence.

Dharamshala has been home to the Tibetan community in exile, including the Dalai Lama, since 1960 when India granted the community land and facilities.

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