Petrobras scandal will 'change Brazil' says president

President Rousseff also has to contend with weak growth and high inflation

Brazil's President Dilma Rousseff has said investigations into corruption at the state-owned oil company, Petrobras, could change the country forever.

She was speaking for the first time since the arrest on Friday of 23 people suspected of corruption and money-laundering.

They include top executives of companies which had contracts with Petrobras.

President Rousseff chaired the board of Petrobras from 2003 to 2010.

"It is a symbolic case for Brazil," she said.

"This will change forever the relationship between Brazilian society, the Brazilian state and private companies."

President Rousseff said all agreements between Petrobras and a handful of large construction companies which acted as contractors for Petrobras would be investigated.

She said the investigation would target individuals rather than Petrobras as a company.

The Petrobras scandal has also spread to MPs of the largest ruling parties, including President Rousseff's Workers Party.

Petrobras, which is majority-owned by the Brazilian government, is one of the largest oil businesses in the world with interests in Asia, Africa and the Middle East.

The investigation began earlier this year when a former executive, Paulo Roberto Costa, alleged that one of its departments paid millions of dollars in bribes to politicians, including members of the governing Workers Party.

Costa, who was arrested in March, has alleged that the refinery division of the company operated a fund that diverted money to political parties.

The resulting probe, codenamed "Car Wash", has led to raids in Parana, Sao Paulo, Rio de Janeiro, Minas Gerais and Pernambuco, as well as Brasilia.

The scandal surrounding Petrobras was a sensitive issue for President Rousseff in last month's presidential election.

She was forced to admit there was evidence of wrongdoing at the company and has promised to try to reimburse Brazilians for the public money that was taken.