By Lewis Jackson

SYDNEY Australia's largest pension fund will pause use of the domestic unit of auditor PricewaterhouseCoopers (PwC) as the "big four" firm reels from a national scandal over its use of confidential government tax plans to drum up work with global clients.

The roughly A$290 billion ($196.71 billion) fund, AustralianSuper, has frozen new contracts with PwC and expressed concerns about the scandal "at the highest level", according to a spokesperson.

An audit contract worth A$1.6 million in 2022, will be reviewed this year, the spokesperson added. The fund spent A$700,000 on non-audit services last year, according to filings.

AustralianSuper's move widens the fallout from a scandal over the misuse of government tax plans and raises the risk that private-sector clients could follow a growing list of government agencies reviewing or pausing their work with the firm.

The Reserve Bank of Australia on Wednesday froze future work while Treasury and the Australian Prudential Regulatory Authority have hinted that the firm is blacklisted.

The scandal centers around a former PwC Australia tax partner who was consulting with the government on laws to prevent corporate tax avoidance and shared confidential drafts with colleagues that were used to pitch U.S. technology companies, among others, for work.

Tax officials told a senate inquiry this week they had foiled several attempts by multinational firms to subvert new tax avoidance laws as a result of the leak.

The A$150 billion AwareSuper said the fund was working with PwC to determine whether tax advisers who had worked with the fund were implicated in the leak. An internal review into external consultants was also under way, a spokesperson added.

($1 = 1.4743 Australian dollars)

(Reporting by Lewis Jackson. Editing by Gerry Doyle)