Challenge to court ruling on BAE

Saudi Arabia is said to have threatened to cancel a Eurofighter order

The Serious Fraud Office is to appeal against a court ruling that it acted unlawfully in dropping its probe into a £43bn BAE arms deal with Saudi Arabia.

The new SFO director Richard Alderman said it would seek leave to appeal at a hearing on Thursday.

The High Court ruled the SFO acted unlawfully by dropping the corruption investigation into the al-Yamamah deal.

The SFO said national security would have been undermined by the inquiry. BAE maintains it acted lawfully.

Public interest

In a statement, Mr Alderman said the court judgment raised "principles of general public importance".

These included the independence of prosecutors and the role of the court in reviewing a prosecutor's evaluation of the public interest, he said.

"The court itself has commented that the issues raised in this case are important points of public interest," he added.

"I will therefore be seeking permission to appeal to the House of Lords to obtain a definitive ruling."

Earlier this month, judges at the High Court said the decision to halt the inquiry represented an "abject surrender" to pressure from a foreign government.

Lord Justice Moses said that the SFO and the government had given into "blatant threats" that Saudi co-operation in the fight against terror would end unless the probe into corruption was halted.

'Diplomatic concerns'

The High Court case was brought by Corner House and the Campaign Against Arms Trade, who said the SFO decision was influenced by government concerns about trade and diplomatic ties with Saudi Arabia.

In a statement, the CAAT and Corner House said they were "confident" they would be able to defend against the appeal.

The al-Yamamah deal with Saudi Arabia was first signed in 1985 but ran into the 1990s and involved BAE selling Tornado and Hawk jets, other weapons and long-running maintenance and training contracts.

BAE was accused of illegal payments to Saudi officials, but the defence company maintains it acted lawfully.

In December 2006, the then-Attorney General, Lord Goldsmith, announced that the SFO was suspending its inquiry into the deal, saying it would have caused "serious damage" to UK-Saudi relations and, in turn, threatened national security.

Saudi Arabia is also reported to have threatened to cancel last year's £20bn deal to buy 72 Eurofighter Typhoon jets from BAE Systems.