* Pollution index tops 300, indicating hazardous air quality
* Singapore sending delegation to Indonesia on Thursday
* Indonesia suggests Singapore companies partly to blame
By Kevin Lim and Eveline Danubrata
SINGAPORE, June 19 Singapore's air quality deteriorated to "hazardous" levels late on Wednesday as smoke from slash-and-burn land clearing in Indonesia enveloped the city-state, inflaming tensions between the Southeast Asian neighbours.
Singapore, a major financial centre, will send a delegation to Jakarta on Thursday to discuss the smog that has turned its usually clear skies grey, Environment Minister Vivian Balakrishnan told a news conference.
The outlines of skyscrapers were barely visible in the central core of the bustling city-state and the smell of burnt wood permeated the air.
"Things will get worse before getting better," the Today newspaper quoted Balakrishnan as saying on its Twitter feed.
The Pollution Standards Index (PSI) soared to a record high of 321 at 10 p.m., up from 290 just an hour earlier and below 200 earlier in the day. The haze has also shrouded some parts of Malaysia.
A PSI reading above 300 indicates "hazardous" air quality, while a reading between 201 and 300 means "very unhealthy".
The 321 level smashed the previous record of 226 reached in Singapore in 1997 when smoke from Indonesian fires disrupted shipping and air travel across Southeast Asia.
Operations at Singapore's Changi Airport, an Asian aviation hub, have not been affected so far but work at some construction sites appeared to have stopped or slowed.
Drug stores and supermarkets ran out of face masks and people queued in long lines to buy multiple boxes of them when fresh supplies came in.
Raffles Quay Asset Management, which manages the Marina Bay Financial Centre complex that houses many of the banks operating in Singapore, said it has issued face masks to security staff.
"They are stationed outdoors for long hours and directly exposed to the haze," it said.
The illegal burning of forests to clear land for palm plantations is a recurring problem in Indonesia, particularly during the annual dry season from June to September.
Indonesian officials have suggested companies based in Singapore may be partly to blame for the blazes. Singapore has said it wants Indonesia to provide maps of land concessions so it can act against firms that allow slash-and-burn farming.
"What we know is that there are several foreign investors from Singapore involved. But we can't just blame them for this since we still need to investigate this further," said Hadi Daryanto, a senior official at Indonesia's Forestry Ministry.
Singapore-based palm oil companies with land concessions in Indonesia include Wilmar International Ltd, Golden Agri-Resources Ltd and First Resources Ltd.
Wilmar, Golden-Agri and First Resources said on Wednesday they had a "zero burning" policies and used only mechanical means to clear land. Cargill, whose Asia-Pacific regional hub is in Singapore, said there were no hotspots nor fire on its plantations in South Sumatra and West Kalimantan.