Lord Goldsmith, QC, was under pressure last night to explain his role in the decision to withhold information from an international anti-bribery watchdog investigating the al-Yamamah arms deal.

The Attorney-General firmly denied yesterday that he had ordered the Serious Fraud Office (SFO) to conceal details of £1 billion in secret payments that were allegedly made to a Saudi prince by BAE Systems with the full knowledge of the Ministry of Defence.

The Times has learnt that Lord Goldsmith was represented at a Whitehall meeting at which talks were held on what to reveal to the Organisation for Economic Cooperation and Development (OECD). The SFO’s head insisted that he had decided what to conceal with “regard to the need to protect national security” but a spokesman refused to say whether he was acting on advice from the Attorney-General.

Lord Goldsmith went on the offensive after reports that he had ordered British investigators to withhold from the OECD information on payments and told colleagues that “government complicity” would be revealed if the investigation was allowed to continue.

“It is absolutely untrue that I ordered investigators to conceal payments from the OECD,” he told the BBC Radio 4 Todayprogramme. “It is categorically denied.”

He received support later from Robert Wardle, SFO director. “The decision as to what information should be given to the OECD about the investigation was made by the SFO. The information provided by the SFO was as full as possible, having regard to the need to protect national security.”

But the SFO later conceded that Lord Goldsmith had been represented a a meeting at which the matter was discussed alongside officials from the Ministry of Defence and the Foreign Office in around March this year. “It is for the Attorney-General to say whether or not he considers he gave advice on this matter,” a spokesman said.

Sir Menzies Campbell, the Liberal Democrat leader, said: “There is now growing pressure on the Attorney-General to explain precisely what role he has played in the decision to withhold information from the OECD.

“Either the SFO decided alone – quite improperly – what was in our national interest or it received instructions from the Government.”

The OECD began looking at the deal after an investigation by the SFO was suddenly halted last year after Tony Blair gave warning that the Saudis were threatening to break off intelligence and security cooperation and could pull out of a defence deal on which thousands of jobs depended.

Mr Blair is refusing to reopen the investigation despite new allegations that huge bribes were paid as part of the £40 billion deal between Saudi Arabia and BAE Systems.

Prince Bandar of Saudi Arabia denies receiving improper payments. He said that the payments – said to be up to £120 million a year – were properly made to the Saudi Ministry of Defence and Aviation under the terms of the deal.

The al-Yamamah agreement to supply the Saudis with more than 100 Tornado and Hawk warplanes was agreed by Margaret Thatcher’s Conservative Government in 1985.

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