For the past two years, the al Yamamah contract - under which BAE Systems and its predecessor British Aerospace have supplied jet fighters to Saudi Arabia for more than two decades - has been the subject of a Serious Fraud Office investigation.

Today the Financial Times reports that the Saudis have suspended negotiations over its latest potential purchase of 72 Eurofighter Typhoons.

That is big time bad news for BAE. When associated contracts are taken into account, Britain's biggest export deal is probably worth around £40bn to the company.

It seems that someone in Riyadh is getting a bit touchy about SFO requests to access details of certain Swiss bank accounts, and is threatening to buy French Rafale fighters instead.

The SFO probe centres around the suggestion that bribes have been paid to members of the Saudi ruling family. But what I guess it won't be looking into is the extensive evidence that members of Britain's former ruling family have also taken massive kickbacks.

Fuelling my cynicism here is the record of earlier investigations into al Yamamah. The National Audit Office launched an inquiry into bribery allegations surrounding the contract in 1989. It took three years. So what was the outcome, you ask? We still don't know.

In March 1992 the House of Commons Public Accounts Committee decided not to publish the NAO's findings. The chairman, Labour MP Robert Sheldon, refused even to disclose the NAO report to committee members, assuring them that there was 'no evidence of fraud or corruption'.

Some Labour MPs expressed 'misgivings'. Martin O'Neill - then Labour's defence spokesman - pledged that a future Labour government would re-open the inquiry. But nine years after Labour returned to office, that still hasn't happened.

In October 1994, Labour MP Tam Dalyell produced two documents - a US intelligence report and an internal British Aircraft Corporation memo - which claimed that Mark Thatcher, the son of former prime minister Margaret Thatcher, received commission payments worth as much as £12m from al Yamamah. He is pictured above with the woman he calls 'mumsy' and the rest of us call ... no, this is a family blog.

But the PAC declined to investigate the matter, deeming it outside its remit, which is restricted to issues concerning taxpayers' money. The claims have never been refuted. And in the intervening years, we have certainly learned much about the ethical standards of the son of our former prime minister.

Last year, Mark Thatcher was forced to leave South Africa after pleading guilty to involvement in a plot to stage a coup in Equatorial Guinea. He was fined $500,000 and given a four-year suspended sentence.

The Campaign Against the Arms Trade website offers an extremely useful dossier on al Yamamah. Read it here.

Meanwhile, I for one will only start taking the claims of Blair to stand for democracy in the Middle East - seemingly accepted as good coin by the pro-war left - when he speaks out against the supply of advanced weaponry to Saudi Arabia, perhaps the most repugnant dictatorship in the world.

Posted at 18:08, 28 November 2006