Indonesia's parliament speaker has been charged in a major graft scandal thought to have cost the state $170 million, after a bizarre drama that involved a failed raid on his palatial estate.

Setya Novanto, who has previously faced allegations of extortion, is among several politicians accused of taking kickbacks from funds for a government project to issue new ID cards.

The scandal, which came to light earlier this year, caused widespread shock even by the standards of one of the world's most corrupt countries.

Novanto was detained for questioning on Sunday, but only after a dramatic string of events in which he emerged from hospital shortly after a raid on his home by anti-corruption investigators.

"We will take every legal step possible to show that he is innocent and we will continue to do so," his lawyer Fredrich Yunadi told AFP.

Indonesia’s Corruption Eradication Commission (KPK) officials had on Wednesday night raided Novanto's multi-million-dollar estate in a ritzy part of the capital, known for its extreme gap between rich and poor.

But the 62-year-old was nowhere to be found, sparking a frantic city-wide search amid fears he had left the country.

In a peculiar twist, the politician showed up in a Jakarta hospital Thursday claiming to have been injured in a car crash.

Doctors said Sunday he showed no signs of serious injuries and was fit for questioning.

Photos showed Novanto wearing an orange vest worn by corruption suspects and being moved in a wheelchair from the hospital to a detention centre.

Novanto, an influential politician from the Golkar Party, has been caught up in corruption scandals in the past.

He was forced to quit as speaker in 2015 after he was named a suspect for extorting a stake from US mining giant Freeport-McMoRan in exchange for extending the company's right to operate in the archipelago.

He was cleared of the allegations and was reappointed as speaker in 2016.

In 2015, he appeared at a news conference at Donald Trump's Manhattan skyscraper, where the now-US president described him as an "amazing man" who would do "great things for the United States".

Source: AFP