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Last Updated: Saturday, 16 December 2006, 19:56 GMT
Legal move over halted BAE probe
Image of Eurofighter seen from the front
Arms deals with Saudi Arabia have been worth billions to the UK
Campaigners are threatening legal action against the UK government after investigators dropped a probe into a key arms deal with Saudi Arabia.

The Campaign Against the Arms Trade and Corner House labelled BAE Systems, the firm accused of corruption, as bullies. BAE strongly denies wrongdoing.

Attorney General Lord Goldsmith said he felt the Serious Fraud Office inquiry would not have led to a prosecution.

SFO head Robert Wardle said he had "a different view" to Lord Goldsmith.

Mr Wardle told the Financial Times newspaper: "There is no guarantee that charges will be brought until you've completed an investigation."

'Powerful body'

Liberal Democrat peer Lord Lester said Britain had to move quickly to change the law to stop political interference in corruption investigations.

"British Aerospace are an enormously powerful body, more powerful than many governments," he told the BBC.

"What is so serious here is that the rule of law is threatened and the reputation of the office of attorney general when there is outside political interference of this kind."

Explaining why his group was taking legal action, Nicholas Gilby from Campaign Against the Arms Trade said the SFO should have been allowed to complete its inquiries.

The SFO should not be tempted to go on these fishing expeditions unless prosecutions are likely and these prosecutions are in the national interest
Bernard Jenkin
Conservative MP

"The government's commitment to fighting fraud means nothing if BAE Systems is placed above the law," he said.

"Democracy must not give way to bullying by arms companies."

The Attorney General's Office said it was unable to comment on "hypothetical" legal situations such as the possibility of action by campaigners.

The SFO had been studying the al-Yamamah arms deal, thought to have earned BAE more than 40bn over the past 20 years.

A successful deal could be worth as much as 6bn

BAE has supplied fighter jets, missiles and helped to construct an airbase for the Saudis.

The company was accused of setting up a slush fund to sweeten the deal - something they have strongly denied.

The end of the inquiry came amid repeated suggestions that the Saudis were angered by the probe and were threatening to pull out of current plans to buy 72 Eurofighter planes from BAE for 6bn.

On Thursday Attorney General Lord Goldsmith announced the SFO was dropping the probe, and said he thought that a prosecution "could not be brought".

He added that the decision had been made in the wider public interest, which had to be balanced against the rule of law.

Lord Goldsmith insisted that no weight has been given to commercial interests or to the UK's national economic interest.

'Sorry episode'

And Prime Minister Tony Blair also said national security had dictated the SFO's decision.

Although current Conservative MPs labelled it a "sorry episode", former Tory defence minister Jonathan Aitken disagreed.

Mr Aitken had responsibility for overseas defence sales during the late 1980s.

He said even if the allegations against BAE were true, it was the correct decision to end the investigation in order to maintain good relations with Saudi Arabia.

Shares in BAE Systems were up almost 7% at the close of trading on Friday.

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