A nationwide alert had been issued after 22 bombs were discovered at a mail centre in the federal capital, Canberra. Two people were slightly injured when one of the packages exploded.

Five other devices were found elsewhere. Police did not want to speculate on how many bombs might still be unaccounted for. They evacuated a train because of a suspect package.

Bomb experts have also been carrying out investigations at a motel in the Australian capital's southern suburbs, police said.

Suspect: Colin Dunstan

Most of the letter-bombs were addressed to tax office staff. Police said the man, 43-year-old Colin Dunstan, was believed to hold a grudge after losing his job in the taxation department.

The suspect is in custody in a hospital in Canberra. Police have not said why he is in hospital.

"He is in a stable condition and we are looking forward to having the opportunity to speak with him," said police spokesman Darryl Webb.

Heavy screens have been erected around the hospital's emergency ward to stop a large crowd of media from looking in.

Internet instructions

Police investigate the Fyshwick Mail Centre in Canberra

A police spokesman said the letter-bombs were sophisticated, well-constructed and designed to explode when opened.

They were white and similar in size to a computer disc storage box - and suggested the Internet may have had a role to play in the plot.

At least three of the letter bombs reached private letterboxes. Among the targets were Federal Privacy Commissioner Moira Scollay, former federal sex discrimination commissioner Sue Walpole and a solicitor working at the Policy Integrity Commission.

Mr Dunstan is said to have lodged an unsuccessful sexual harassment case against a female co-worker which went to the Human Rights and Equal Opportunities Commission.

There have been a string of false alarms around Australia over the past two days.

Urban terrorism 'reality'

Prime Minister John Howard has said that conservative Australia to date had largely been free of terror campaigns.

"It's a reminder that that kind of urban terrorism is a modern day reality in every society," Mr Howard told Melbourne radio 3AW on Friday.