Saudi Arabia denies secret arms
talks with Britain

By Dominic Evans

RIYADH (Reuters) - Saudi Arabia denied on Sunday holding secret talks with Britain to buy Eurofighter Typhoon jets but said Britain was one of several countries which have expressed an interest in supplying planes to the kingdom.

Responding to a British newspaper report that Prime Minister Tony Blair secretly sought a $71 billion arms deal with Riyadh, the Defence Ministry said Saudi Arabia "has not requested, nor received any offer -- official or unofficial -- from Britain in this matter".

"There are no secret talks between the two countries over a contract to sell Typhoon planes," a defence ministry source said in a statement carried by the official Saudi Press Agency.

"But Britain has clearly expressed its wish to supply Saudi Arabia with these planes, as have several friendly countries which manufacture advanced weapons systems," the source said.

Britain has been discreetly lobbying for the Eurofighter, built by BAE Systems, Airbus parent EADS and Alenia Aeronautica, part of Italy's Finmeccanica.

Eurofighters competitors include France's Dassault Aviation, maker of the Rafale combat jets. A French diplomatic source denied reports in April that France signed a memorandum to sell 48 Rafales but said there have been talks about a sale.

Saudi Arabia could also choose to buy Lockheed Martin's F-16 fighter jets or Boeing's F-15s.

Blair, who made a visit to Saudi Arabia in July, declined to say at the time whether he had discussed arms sales to the world's biggest oil exporter. Britain's Guardian newspaper reported the secret talks for the jet on Tuesday.

Britain's former defence minister Geoff Hoon and his successor John Reid have also visited Riyadh this year.

SAUDI ANGER

Diplomats say Saudi anger at the presence in London of prominent Saudi dissidents Saad al-Fagih and Mohammad al-Masari could threaten the chances of British firms winning contracts.

They said Saudi officials were also upset by an investigation by Britain's Serious Fraud Office into alleged false accounting by two firms linked to BAE, and press reports of a BAE "slush fund" to influence Saudi officials.

BAE has denied ever having such a fund.

Sunday's statement from Saudi Defence Ministry said the kingdom would decide on "purely operational requirements and not on the basis of any political deal".

Saudi Arabia and Britain signed a deal in the 1980s, known as the Al Yamamah agreement, to supply Saudi Arabia with fighter planes, artillery and other equipment. The prime contractor was BAE Systems.

In July BAE chief executive Mike Turner was quoted as telling Flight International magazine that further lucrative contracts could be won in the Gulf state.

"The objective is to get the Typhoon into Saudi Arabia. We've had 43 billion pounds ($71 billion) from Al Yamamah over the last 20 years and there could be another 40 billion," the magazine quoted him as saying.