Glamorous hostesses were allegedly paid tens of thousands of pounds from a BAE Systems slush fund to attend lavish parties where a Saudi prince and his entourage were guests of honour.

According to documents seen by The Sunday Times, the money was paid to Anouska Bolton Lee and Karajan Mallinder to meet mortgage, rent, credit card and council tax bills.

The two women went to parties in a penthouse suite at the Carlton Tower hotel in Knightsbridge attended by Prince Turki bin Nasser and other senior Saudis involved in the £40 billion al-Yamamah arms deal.

The claims will revive the controversy over the Government’s decision to order the Serious Fraud Office (SFO) to abandon a long-running corruption inquiry, which had been examining BAE’s relationship with the Saudi regime.

The SFO had amassed a wealth of material and, since 2004, had been attempting to piece together the workings of the alleged £60 million slush fund. But the investigation was abandoned last December after consultations between the Prime Minister and Lord Goldsmith, QC, the Attorney-General.

The move followed pressure from Saudi Arabia, which had expressed anger at the SFO inquiry and was threatening to back out of a £10 billion deal to buy Eurofighter jets from BAE.

There were also claims that the Saudis would withdraw cooperation on counter-terrorism and intelligence.

Robert Wardle, the director of the SFO, said that the inquiry had been discontinued because of “the need to safeguard national and international security”.

Lord Goldsmith told Parliament that the investigation had been discontinued in the national interest. But allegations of political interference have persisted, and the Organisation for Economic Cooperation and Development (OECD) has expressed serious concerns over the case and asked for an explanation of the decision to drop it. The OECD also raised worries about “continued shortcomings” in British anticorruption legislation.

The payments to Ms Mallinder and Ms Bolton Lee were said to have been made in 2001 and 2002 and routed through a travel company.

Ms Mallinder, 42, a model and actress, was once engaged to David van Day, the singer in the 1980s pop duo Dollar. Ms Bolton Lee, 29, a former lingerie model, has appeared in a number of acting roles and worked as a presenter on the MTV show Blaggers.

A spokesman for BAE Systems said yesterday: “Throughout the long SFO investigation we were consistent in denying allegations of wrongdoing.

“The SFO has considered a huge volume of material over the course of its investigation which it then decided should be terminated. We are not making any comment on these continued allegations.”

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