Saudi inquiry decision faces legal challenge

PM and attorney general offer different accounts of why probe was dropped

The government's controversial decision to drop a Serious Fraud Office 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 last night.

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 QC, David Pannick, has been hired.

Yesterday confusion over the background to the decision to halt the arms corruption inquiry deepened as Tony Blair and Lord Goldsmith offered apparently conflicting explanations.

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