Blair defensive over probe

Speaking in Brussels ahead of a Middle East tour, Mr Blair said that months or years of “ill feeling” between Britain and “a key partner and ally” would have developed if the investigation had been allowed to proceed.

“Our relationship with Saudi Arabia is vitally important for our country in terms of counter terrorism, in terms of the broader Middle East, in terms of helping in respect of Israel-Palestine,” Mr Blair told reporters.

Mr Blair, who also said concerns about possible job losses were a smaller factor, added that he took “full responsibility” for his advice about the case to Lord Peter Goldsmith, the attorney general.

Lord Goldsmith announced on Thursday that the Serious Fraud Office (SFO) had abandoned the probe, prompting charges that government was undermining Britain’s reputation for clean business practices by succumbing to Saudi pressure.

He said the SFO made the move after representations made both to him and the head of the SFO “concerning the need to safeguard national and international security.”

The SFO had been running an investigation into claims that BAE established a slush fund for some Saudi royal family members, which allegedly provided perks including luxury cars to keep them on board at BAE.

The fund was allegedly linked to an estimated £50 billion (A$124 billion) deal from the 1980s involving the supply and support of Tornado and Hawk jets as well as the construction of an airbase.

BAE earlier this year agreed to a £10 billion deal with Saudi Arabia for 72 Eurofighter jets, and the deal was reportedly under threat because of the SFO investigation.

Lord Goldsmith told BBC radio on Friday that he was “uncomfortable” about claims that he had bowed to pressure from Saudi Arabia, but said it made little sense to proceed with a case where there was a high risk of failing to prosecute it.

He said he had spent days going through the evidence with investigators and lawyers from the SFO. “There were some very big problems with this and my judgment was it wouldn’t succeed,” he said.

Lord Goldsmith also insisted that the government was “absolutely not relaxed” about corruption and Britain’s overseas reputation, adding that those issues “matter hugely”.

Eric Illsley, a Labour member of parliament on the Foreign Affairs Select Committee, said: “We appear to be giving businessmen carte blanche to do business with Saudi Arabia which may involve illegal payments or illegal inducements.”

He said he would not go as far as accusing anybody of blackmail, but added: “We have been leaned on very heavily by the Saudis.”

Lord Clinton-Davis, a Labour former trade minister, added that he was “very disappointed” by the decision. “The really essential thing we have to bear in mind is what others think of our reputation,” he said.

Norman Lamb, a Liberal Democrat party executive, said: “This completely undermines the UK’s reputation on good governance” and exposes Britain to charges of hypocrisy when it lectures poor countries on good governance.

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