A SAUDI prince, who is alleged to have received £1 billion in payments in the BAE Systems arms deal, personally lobbied Downing Street to get it to drop a criminal inquiry into the contract, claim senior Whitehall officials, writes David Leppard.

Prince Bandar bin Sultan, head of Saudi Arabia’s national security council, met Tony Blair last July at the height of the Serious Fraud Office (SFO) inquiry into claims that BAE had illegally paid huge sums to members of the Saudi royal family.

Bandar is said by a second senior government official to have told Jonathan Powell, Blair’s chief of staff, that the Saudis would pull out of the arms deal, which involved the sale of 72 Typhoon jets, unless the investigation was stopped. He also said intelligence ties in the war on terror would be cut.

At the time, the SFO was preparing to examine payments to accounts in Switzerland. But the inquiry was suddenly halted by ministers last December. A senior official said: “Bandar went into No 10 and said: ‘Get it stopped’.”

Another official said Bandar’s approach followed the SFO’s discovery of secret Swiss bank accounts that investigators believed were linked to the £43 billion deal.

“Bandar suggested to Powell he knew the SFO were looking at the Swiss accounts,” said the official. “If they didn’t stop it [the investigation], the Typhoon contract was going to be stopped and intelligence and diplomatic relations would be pulled.”

Robert Wardle, director of the SFO, said yesterday that he could not discuss the matter.

However, an SFO official said: “We were investigating payments. That was what the whole Swiss thing was about. We didn’t know whether they were to Bandar or whomever. They may well not have been improper.”

It has already been reported that the Saudis mounted a lobbying campaign last year to get the investigation halted. The Saudis had told Powell and Blair they would cut intelligence and diplomatic ties if the investigation into the alleged payments continued.

Last December Lord Goldsmith, the attorney-general, announced the investigation was being halted on national security grounds. However, Bandar’s role in the campaign has not previously been disclosed.

Bandar, who is said to be in hospital in California, was unavailable. His lawyer said he denied any impropriety over the alleged £1 billion payments.

However, a friend of Bandar said: “He may well have spoken to Blair or Jonathan Powell about the SFO inquiry. But you should consider it was likely that in doing so he was representing his government and not himself.”

Downing Street said it was “no surprise” Bandar, a valued ally of Britain, regularly met officials and ministers but an official denied any ultimatum over the contract.

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