KAMPALA (Reuters) - The Ugandan government has halted pension payments to its retired workers until an investigation into corruption allegations involving "ghost" recipients is completed, a senior official told Reuters on Friday.

East Africa's third-largest economy is plagued by a culture of corruption and President Yoweri Museveni has come under criticism from opposition politicians and Western donors for being too soft on officials accused of graft.

Last year Uganda was rattled by a wave of anti-government protests over the sky-high cost of living and widespread theft of public funds.

Government payrolls are often inflated by officials keen to steal the extra money and local media use the term "ghosts" to describe those non-existent government workers.

"We have decided to suspend any further disbursement of pensions until investigations are completed and the register of recipients cleaned of all ghosts," said Keith Muhakanizi, deputy secretary to the Treasury.

The halting of payments followed the launching of a police investigation into the alleged embezzlement of 63 billion shillings (15 million pounds) meant for retired government workers.

A number of government officials involved in the illegal payments have already been arrested.

"We're aware this will inconvenience genuine pensioners but we're hoping investigations will be short, and hopefully in a few weeks' time payments will resume," Muhakanizi said.

(Editing by James Macharia and Pravin Char)

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