Blair in secret Saudi mission

Expulsions link to £40bn arms deal

David Leigh and
Ewen MacAskill

Tony Blair and John Reid, the defence secretary, have been holding secret talks with Saudi Arabia in pursuit of a huge arms deal worth up to £40bn, according to diplomatic sources.

Mr Blair went to Riyadh on July 2, en route to Singapore, where Britain was bidding for the 2012 Olympics. Three weeks later, Mr Reid made a two-day visit, when he sought to persuade Prince Sultan, the crown prince, to re-equip his air force with the Typhoon, the European fighter plane of which the British arms company BAE has the lion's share of manufacturing.

Defence, diplomatic and legal sources say negotiations are stalling because the Saudis are demanding three favours. These are that Britain should expel two anti-Saudi dissidents, Saad al-Faqih and Mohammed al-Masari; that British Airways should resume flights to Riyadh, currently cancelled through terrorism fears; and that a corruption investigation implicating the Saudi ruling family and BAE should be dropped. Crown prince Sultan's son-in-law, Prince Turki bin Nasr, is at the centre of a "slush fund" investigation by the Serious Fraud Office.

The Saudis have been trying for years to get their hands on Mr Faqih, who they say was involved in a plot to assassinate the recently enthroned King Abdullah. Mr Faqih, who has asylum, denies support for violence, and privately neither the Foreign Office nor the security services regard him as a danger to Britain. Mr Masari fled Saudi Arabia in 1994, and the Major government made an unsuccessful attempt to exile him to the Caribbean island of Dominica under pressure from BAE.

The Typhoon, currently entering service with the RAF, has a price of more than £45m a plane. Saudi Arabia previously bought a fleet of its predecessor Tornados from Britain in the Al Yamamah arms deal. Mike Turner, the chief executive of BAE, Britain's biggest arms company, was quoted in Flight International magazine on June 21, just before Mr Blair's Riyadh trip, saying: "The objective is to get the Typhoon into Saudi Arabia. We've had £43bn from Al Yamamah over the last 20 years and there could be another £40bn."

There is concern within the Foreign Office at the apparent partiality of No 10 to BAE's commercial interests. Jonathan Powell, Mr Blair's chief of staff, and his brother Charles, Lady Thatcher's former adviser and now a BAE consultant, are believed to be in favour of the deal.


Saudis link £40bn arms deal to call to expel dissidents

· Foreign Office has doubts over Eurofighter sale
· Fraud squad investigation is also a stumbling block

David Leigh and
Rob Evans

If Downing Street bows to today's reported Saudi demands for concessions in the hope of a Eurofighter sale worth up to £40bn, it will face dissent from the Foreign Office, the Serious Fraud Office, and British Airways. There will also be anger from such expatriate victims of Saudi behaviour as Ron Jones, who is trying to sue the regime for falsely imprisoning and torturing him.

Whitehall sources point to the two Powell brothers, who they claim are enthusiasts for the deal. Jonathan Powell, Tony Blair's chief of staff, is said to be pro-Saudi. His brother Charles, now Lord Powell, also has access to Downing Street. He was Margaret Thatcher's foreign affairs adviser, and is now on BAE's payroll as a consultant, according to the current register of Lords' interests. BAE stands to make massive sums from a deal to sell the Eurofighter Typhoon to Riyadh.

It is made in Germany, Italy, Spain and Britain, with the UK responsible for a third of its manufacturing. It was due to fly in 1998 at a cost of £17bn, but it is now estimated to have cost almost £20bn. Austria has agreed to buy 18 planes, but few other states have made a purchase.

One cause of Foreign Office unease is that the existing supply of Tornado warplanes involves the presence of thousands of British technicians in Saudi Arabia. A follow-on Typhoon deal would lead to the influx of thousands more, with their families, who might be terrorist targets.

The two dissidents that Saudi Arabia wants expelled from Britain are another sore point, although the London bombings have strengthened the hand of those who want them ejected.

Mohammed al-Masari fled Saudi Arabia in 1994. The Major government, under pressure from Saudi Arabia and the arms company BAE, attempted unsuccessfully to deport him to Dominica in the Caribbean. He has since come under fresh pressure for involvement in a radio station applauding attacks on British troops in Iraq.

The expulsion of Saad al-Faqih, who has asylum and lives in Willesden, north London, would be even more controversial. He told the Guardian the Saudis had been complaining about him since 1994 but he has only been engaged in peaceful political dissent.

"The Saudis want to convince the British of lies trying to link me to violence. They are not only lies but contradictory."

He added: "If the British goverment is led by the Saudis and naive tabloids, I will be in danger."

Whitehall sources say that he has never been shown to be a terrorist.

British Airways says it has no plans to resume flights to Saudi Arabia, which have been halted since March. The threat of terrorist attacks was scaring off passengers. "We had hoped that it would be a temporary measure but now the outlook looks as though it will not change in the short term."

Asked if BA had come under pressure from the British or Saudi governments, it said: "It is not something that we are prepared to get into, because the decision was made for commercial reasons. The number of passengers had dropped off significantly. It was no longer profitable."

The Saudis' third demand, that the BAE corruption investigation be dropped, seems difficult to comply with at this stage. The Serious Fraud Office, which would not comment on the allegations, has devoted a sizeable budget to its joint investigation with the Ministry of Defence police fraud squad.

Last month it made a fresh round of arrests for questioning, after discovering a fleet of luxury cars supplied to Prince Turki bin Nasr had been shipped out of London this year.

In the next six months, it is expected to prepare a report for Lord Goldsmith, the attorney general, who will have the final say on prosecutions. Although he is a politician who attends the cabinet, Lord Goldsmith, who came under wounding attack for altering his advice to Mr Blair on the legality of the Iraq invasion, prizes his reputation for integrity.

BAE's chief executive, Mike Turner, told the Sunday Telegraph in June that the Saudis had already made representations to the UK government over the corruption allegations. "They don't, rightly, like the fact that members of their royal family are being named in our press."