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Sun 10 Aug 2008 10:40 AM

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BAE in new Saudi arms deal

UK's largest defence contractor to sell dozens more Eurofighter Typhoon aircraft to kingdom.

BAE Systems is in talks to sell dozens more Eurofighter Typhoon aircraft to Saudi Arabia, UK media reported on Sunday.

Senior defence industry sources told The Sunday Times that negotiations - which have been under way for some months - have been given added impetus by a controversial House of Lords decision last month.

The Lords said the Serious Fraud Office had been right to suspend a probe into alleged bribery, reversing an earlier Court of Appeal decision.

BAE, Britain’s largest defence contractor, may provide as many as 70 extra combat aircraft to the Saudis, although some defence industry executives say the contract is likely to be for 48, the newspaper said.

Saudi Arabia has already bought 72 Eurofighters, the first of which are being built by BAE. The first Eurofighter deal was worth $8.25 billion for the aircraft, with the contract value likely to grow to $38.4 billion once support and maintenance are included. The new deal will be of a similar size, according to the report.

Saudi Arabia buys arms from Britain under government-to-government deals, the largest of which, Al-Yamamah, was negotiated with the help of former prime minister Margaret Thatcher.

BAE has acted as the main contractor, providing, first, Tornado aircraft and then billions of pounds worth of support, training and other military equipment.

The Serious Fraud Office probe, which was shut down in December 2006, related to the Al-Yamamah agreement. It investigated whether BAE offered sweeteners to officials from Saudi Arabia in return for lucrative contracts. BAE has always denied any wrongdoing.