New Labour - Old sleaze - Saudis and BAE blackmail Part 2New Labour - Old sleaze - Saudis and BAE blackmail Part 3NOW WE KNOW WHY:- Tony Blair has defended the government's decision to halt the Serious Fraud Office's (SFO) investigation into alleged bribery surrounding BAE Systems' contracts with Saudi Arabia.
The prime minister told the House of Commons continuing the investigation would have damaged the UK's relationship with Saudi Arabia.
However, he refuted allegations the attorney general Lord Goldsmith had attempted to block a subsequent Organisation for Economic Cooperation and Development (OECD) investigation as "completely and totally unfair and wrong".
It had been alleged Lord Goldsmith had warned officials not to disclose information to the OECD investigation.
Quizzed in prime minister's questions, Mr Blair defended the decision not to pursue an inquiry.
He said: "First of all these allegations are strenuously denied by the Saudi royal family, secondly if we were then going to conduct an investigation then that might last two, three years into these allegations that frankly I think would lead absolutely nowhere.
"What it would lead to is the complete wreckage of a relationship that is of fundamental importance of the security of this country, to the state of the Middle East, and to our relationship with countries in the Middle East."
Mr Blair continued: "I was asked for my advice as to what damage this investigation would do if it continued. I gave that advice because of the huge importance of working with Saudi Arabia on the Middle East peace process, on counter-terrorism, on the situation in the Middle East.
"I stick by that, and the idea frankly that such an investigation could be conducted without doing damage to our relationship is cloud cuckoo land, which after all is the natural habitat of the Liberal Democrats."
The Liberal Democrats have called on Mr Blair to confirm what he knew about the alleged bribery and when -- noting that bribery of a foreign official became illegal in 2002.
Since 1985, BAE Systems has signed £43 billion worth of arms contract with Saudi Arabia. But it was alleged these were agreed in return for payments totalling £1 billion to Prince Bander.
The government halted a SFO investigation in December 2006 and the case has since been investigated by the OECD
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