The Department of the Prime Minister and Cabinet has suspended a Commonwealth employee after he was arrested for allegedly committing indecent acts against a minor.

It's understood the 58-year old public servant was arrested on Sunday and appeared in Alice Springs local court on Monday.  SkyNews reported he allegedly offered cigarettes to children in exchange for sexual favors.  He is charged with seven counts of indecent dealings with a child under 16 years of age and was remanded in custody.  The case is continued until next month.

"The Australian Public Service has a zero tolerance for any abuse, particularly abuse of children," said PM&C secretary Martin Parkinson, the government's top-ranking public servant, in confirming the arrest.  "These allegations are extremely disturbing and we are cooperating fully with the Northern Territory Police."