Secret files reveal how Thatcher negociated Saudi arms deal

Previously secret government files reveal how officials helped former prime minister Margaret Thatcher carefully manage negotiations with the Saudis to land the UK's biggest ever 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.

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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.”