FRAUD OFFICE APPEALS OVER BAE PROBE

The SFO said it will seek leave to appeal the High Court ruling that it "unlawfully submitted" to "blatant threats" from the Saudis.

Earlier this month the court ruled in favour of anti-bribery campaigners who claimed the SFO should have continued its probe into alleged illegal payments to members of the Saudi royal family.

The Government argued the inquiry put anti-terrorism co-operation with the Saudis under threat.

In a statement, the SFO's new director Richard Alderman said it would seek leave to appeal at a hearing on Thursday.

"The judgment of the divisional court raises principles of general public importance affecting, among other things, the independence of prosecutors and the role of the court in reviewing a prosecutor's evaluation of the public interest in a case like this," he said.

The judicial review was brought by anti-bribery campaigners Corner House and Campaign Against Arms Trade (CAAT). They argued the decision to abandon the probe was tainted by Government concerns about trade with Saudi Arabia and diplomatic considerations.

And in a highly critical judgment, Lord Justice Moses and Mr Justice Sullivan said the Government and the SFO "unlawfully submitted" to threats that there could be "another 7/7" unless the probe was dropped.

BAE's £43 billion Al-Yamamah arms deal with Saudi Arabia in 1985 provided Tornado and Hawk jets plus other military equipment.

The investigation was abandoned in December 2006. At the time, then-PM Tony Blair said the Saudis had privately threatened to cut intelligence co-operation with Britain unless the inquiry was stopped.