MELBOURNE, Australia—The Navy is investigating allegations that male sailors ran a betting ring offering rewards for having sex with female colleagues, Deputy Prime Minister Julia Gillard said Sunday.

Gillard confirmed reports that a navy inquiry was underway into the alleged betting set-up aboard the HMAS Success and expressed concern it could deter women from joining the military.

"We don't want to see anything that precludes women from having a good career in our armed forces if that's what they choose to do with their lives," Gillard told Channel 10 television.

"Clearly these allegations need to be fully investigated."

The sailors on the Success allegedly kept a book called "The Ledger" in which dollar values were placed on each woman's head, Channel Seven television reported.

Female officers and lesbians attracted higher values and premiums were paid if sailors could engage in sex in unusual locations such as the top of a pool table, the report said.

It said the alleged betting ring was discovered while HMAS Success was visiting Singapore in May.

Navy chief vice admiral Russ Crane said four sailors were ordered back to Australia and interviewed.

"Our navy people will not tolerate this type of behavior," he said in a statement.

"Once these allegations were made known, the navy acted immediately by removing those sailors allegedly involved in the matter from the ship and referring the matter to the independent Australian Defense Force Investigative Service for action."

Crane said the investigation into the allegations was still underway.