Lord Goldsmith, the Attorney-General, ordered the concealment from antibribery watchdogs of payments totalling more than £1 billion to a Saudi prince, it was reported last night.

He is said to have warned colleagues last year that “government complicity” in the payment of sums to Prince Bandar, the former Saudi Ambassador to the US, would be revealed if a Serious Fraud Office inquiry into the arms company was allowed to continue.

When the Serious Fraud Office investigation into BAE Systems was halted in December on government orders, the Organisation for Economic Cooperation and Development (OECD) undertook its own inquiry. Last night The Guardian claimed that, when OECD representatives met British officials in January and March, they were not given full disclosure. Sources close to both the OECD and the US Justice Department, whose members help to police the anticorruption treaty to which Britain is a signatory, told the newspaper that officials had not disclosed the alleged payments to the Prince in connection with the al-Yamamah arms deal.

The OECD believed that the Serious Fraud Office inquiry had concentrated on alleged slush funds set up by BAE Systems to provide treats for Saudi officials. One source told the paper: “When the British officials gave their briefing they gave some details of the allegations, but it now transpires not all of them.”

A spokesman for Lord Goldsmith said that full information had not been given to protect national security. BAE said any transactions over the deal had the Government’s “express approval”. It has denied any wrongdoing.

Times Recommends

• Why Witherspoon is highlighting domestic violence
• No, MP does not stand for Mostly Plastered
• Don’t bottle out of your champagne moment