Secret files reveal how Thatcher negociated Saudi arms deal

Thatcher lobbied hard with the Saudi royal family to secure the controversial Al-Yamamah contract. Picture: Getty Images

In April 1985 Mrs Thatcher visited Saudi Arabia and helped clinch the notorious Al-Yamamah contract.

The Saudis had been leaning towards buying fighter aircraft from France, but Mrs Thatcher lobbied hard with the Saudi royal family to press the deal home.

The Al-Yamamah deal proved highly controversial with anti-arms trade campaigners appalled Britain was supplying military hardware to a regime with a reputation for human rights abuses and torture, and allegations the contract was won through bribery payments.

The £43 billion contract saw defence giant BAE Systems supply more than 100 fighter jets to Saudi Arabia, but there were claims the firm ran a multimillion-pound “slush fund” offering sweeteners to Saudi royals and shady intermediaries.

A 1992 report by the National Audit Office into the deal was suppressed over fears it may offend the Saudis and more than a decade later the Serious Fraud Office launched an investigation.

That was dropped in 2006 after intervention by Tony Blair, and in 2010 BAE Systems eventually reached a settlement over corruption claims with the Serious Fraud Office and the US department of justice that cost it £286m.

Files released by the National Archives now reveal the delicate tightrope the prime minister had to walk to initially secure the contract – and the efforts to keep the talks secret.

Mrs Thatcher was invited by Prince Bandar to meet King Fahd in Riyadh.

A briefing document from the Foreign Office to Downing Street suggested the prospects of a deal over the Tornados was likely to be the true intention of the visit, but a full confirmation was needed.

It said: “To date, we only have Prince Bandar’s word for it that the king has decided to buy Tornado. We need to get this made more precise and explicit.”