Reports from Saudi Arabia say the authorities are preparing to hand over a forty-year-old Japanese oil concession to a Saudi company, following the break-down of negotiations with Tokyo.

The concession, in the neutral zone on the border with Kuwait, expires in three weeks' time, but the Japanese have refused to build a two-billion-dollar railway to remote mining areas as part of the terms for renewal.

One Saudi newspaper, ar-Riyadh, which like all the Saudi media reflects the official view, accused the Japanese of negotiating with the mentality of a stingy trader. It said Japan had been granted the concession when it was in need, after the Second World War, but had not reciprocated Saudi Arabia's generosity and had done little to improve the living standards of its Saudi employees. The Saudi oil minister is due in Japan for an oil syposium in two weeks.

From the newsroom of the BBC World Service