AN Australian man who allegedly posed as a policeman to smuggle 10kg of pure cocaine through Italy faces up to 20 years in jail.

The man, 30, variously described as a Queenslander and Sydneysider, was named by Italian authorities yesterday as Fuc Iang Lay. Mr Lay is in jail awaiting trial after being arrested by Italian police at Rome airport on August 15 and charged with drug trafficking.

"Reports of him being a policeman are incorrect," an Australian embassy official in Rome said yesterday.

"He may well have been pretending to be a policeman.

"He has an Australian passport. Consular officers are providing assistance to the man and his family in Australia."

Italy's finance police described Lay yesterday as a "security agent from Sydney".

An Italian court official yesterday said Mr Lay had been born in "East Timor, Australia".

A court hearing has not yet been set for Mr Lay, who met Australian consular officials in a prison outside Rome on Tuesday and is due to meet Portuguese diplomats today.

Italy's paramilitary financial police yesterday issued a press release describing the man as a "narco-policeman".

The 10kg of cocaine allegedly hidden in the man's suitcase could have been transformed into 50kg of street cocaine with a value of E5 million ($8.1 million), they said.

"Of Portuguese origin, the young man had just arrived from (the Venezuelan capital) Caracas and was preparing to depart on a plane for Istanbul," police said.

"Stopped along the transit corridor, he responded confidently, without betraying any sign of agitation. But a check of his baggage revealed 10kg of cocaine ingeniously concealed in a false bottom. The drug was practically pure, and could have resulted in 50kg of street cocaine with a market value of E5 million."

A spokeswoman for the Australian Federal Police said earlier Mr Lay was not a former or serving AFP officer.

AN Australian man has been arrested in Italy after allegedly being found with $8 million worth of cocaine.

The 30-year-old, identified only by the initials LFI, has been in a Roman jail since his arrest last week, which was revealed early today.

He faces up to 20 years in prison for smuggling.

He was stopped at Rome's Fiumicino airport between stepping off an Alitalia flight from Venezuela and boarding another for Istanbul.

Officials had been alerted by his behaviour at the luggage carousel and challenged him as he hurried through the airport transit lounge.

At first he said they "had the wrong man" and allegedly claimed he was a "former police officer".

Reports this morning suggested he had an identity card that showed he was a security guard.

Early this morning Major Ernesto Bruno, of the Fiumicino Customs, said: "This was a major seizure and down to good old-fashioned initiative.

"This particular flight is always closely watched and the man aroused suspicion because of his behaviour. He was watched and after he picked up his suitcase he ran through the lounge.

"When we stopped him he said he was in a hurry to catch the Istanbul flight, but he had hours.

"His luggage was searched and a false bottom in his suitcase revealed 10, 1kg packets of cocaine. He has now been charged with international drug smuggling."