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UK arms probe decision disputed

The British government's controversial decision to drop a Serious Fraud Office (SFO) investigation into allegations that Saudi officials were bribed to win a lucrative order for a British arms firm could be challenged in the high court, it emerged on Friday.

Anti-arms trade campaigners yesterday instructed lawyers to consider a legal action against Lord Goldsmith, the attorney general, after he halted the SFO inquiry into allegations of corruption by officials from BAE Systems when sealing the al-Yamamah deal in the 1980s.

The pressure groups Campaign against the Arms Trade and the Corner House, a social and environmental justice group, believe the grounds for the decision -- made after the prime minister warned it was against Britain's security and foreign policy interests -- could be subject to judicial review. A leading queen's counsel attorney, David Pannick, has been hired.

Yesterday confusion over the background to the decision to halt the arms corruption inquiry deep-ened as British Prime Minister Tony Blair and Attorney General Lord Goldsmith apparently offered conflicting explanations.

Blair told reporters at the European Council in Brussels that he accepted "full responsibility" for ending the inquiry. It could have provoked years of "ill-feeling" with the Saudis, a crucial ally in the Middle East, he said.

"Leave aside the effect on thousands of British jobs and billions worth of pounds for British industry ... our relationship with Saudi Arabia is vitally important for our country in terms of counterterrorism, in terms of the broader Middle East and in terms of helping in respect of Israel and Palestine," Blair said.

But a spokesman for the prime minister's office said Lord Gold-smith's assessment of the SFO case was the key.

"The attorney general's view, having gone through the evidence, was that it was unlikely that a successful prosecution resulting in conviction could be brought, even after a further period of investigation. In shorthand, he didn't think the case was going ahead," the spokesman said.

Shortly afterwards, Lord Goldsmith insisted that the Serious Fraud Office had taken the lead in dropping the investigation.

Speaking on BBC Radio 4, he said: "I looked at it myself, took some independent advice, so when the SFO said to me, `Our judgment is that in the national interest this shouldn't go ahead -- what do you think?' my judgment was, `Well, I actually agree that this case should be discontinued,' although for somewhat different reasons, because I didn't just think the case was uncertain. My judgment at this stage was that it wouldn't go anywhere at the end of the day."

SFO officials would not comment on the case, but Lord Goldsmith called them in earlier in the week and cast doubt over their evidence, gathered in around 20 boxes.

Sir Menzies Campbell, the opposition Liberal Democrat leader, called on the attorney general to release his legal advice on a "sorry day for Britain's reputation."

BAE Systems' share price shot up on the FTSE by 27.25 points, the biggest winner on the day.
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