BAE bought £75m Airbus for Saudi prince

BAE gave Prince Bandar of Saudi Arabia an airliner as part of Britain's al-Yamamah arms deal, and the arms firm is still paying the expenses of flying it, the Guardian can disclose. The top of the range, four-engine Airbus 340, worth £75m, was painted in the silver and blue colours of Bandar's favourite American football team, the Dallas Cowboys, and is said to have been presented to him on his birthday in 1998.

According to his most recent approved biographer William Simpson, the aircraft, described as Bandar's "private plane", is heavily used. He says the aircraft flight log includes such destinations as St Lucia in the Caribbean, Rio de Janeiro, Casablanca, Cape Town and Honolulu.

Prince Bandar's lawyers said last night the aircraft was purchased and fitted out by BAE for the Saudi ministry of defence "pursuant to the al-Yamamah programme". It was part of the deal, they said, that "BAE continues to be responsible for the operation and maintenance of the plane".

The lawyers said the plane was owned by the Saudi air force and had been used by other Saudi dignitaries including King Abdullah and the foreign minister Prince Faisal. It would be wrong to suggest it was a "corrupt gift", the legal representatives said.

Prince Bandar denies any impropriety in allegations that he has been paid more than £1bn by BAE for his part in arranging the al-Yamamah deal, which was under investigation by the Serious Fraud Office until Tony Blair halted the inquiry on "national security" grounds.

The prince says payments consisted of Saudi official funds and were used for purposes approved by the Saudi ministry of defence. BAE also deny any impropriety, saying all payments were made with UK government "express approval", and were confidential.

Yesterday, the attorney-general, Lord Goldsmith, officially admitted that facts were withheld from the international anti-corruption watchdog, the Organisation for Economic Cooperation and Development, about Bandar payments. He said the "national security" cover-up was to prevent leaks to other foreign countries.

The OECD panel is monitoring Britain's compliance with its anti-bribery treaty, and expressed "serious concern" after a police inquiry was halted. Lord Goldsmith says he was ignorant of the OECD cover-up move, made by Serious Fraud Office officials. Writing to Menzies Campbell, leader of the Liberal Democrats, Lord Goldsmith said: "Indeed, I did not know the judgment the SFO had reached about this issue until it arose in the media last week."

He added: "I gave no orders, instructions or advice to the SFO about that." He said Jonathan Jones, his director-general, was present at the Paris meetings "to deal with ... the national security aspects". He said Mr Jones "was aware generally of what the SFO proposed to say and participated in discussions in preparation for the working group meeting".

But he said "what level of detail to give about particular payments" never arose in those discussions

At the Paris meetings of the OECD anti-bribery panel, where prosecutors from the US department of justice were present, the SFO assistant director voluntarily "disclosed ... that they were investigating a series of payments to a senior Saudi official". But "the individual was not named, nor were details provided of the payments".

Lord Goldsmith said: "The OECD did not ask for any more details."

He added: "The SFO would have been cautious about unnecessarily revealing information which could have gone widely into public circulation, leading to the very damage to national security which the decision to stop the investigation was designed to avoid."

Sir Menzies said last night: "These events get curiouser and curiouser. Major decisions ... were taken by officials and not by those with direct ministerial responsibility. The plain unvarnished truth is that Britain did not reveal significant information to the OECD."

The US department of justice is understood to be "99% certain" to open an investigation in Washington into use of the US banking system for the alleged payments.

Prince Bandar's aircraft, which he is said to frequently lend to other members of the Saudi royal family, has often been seen by plane spotters landing at RAF Brize Norton, the airfield closest to his 2,000-acre country estate at Glympton in Oxfordshire, and at an airfield in Colorado near his US ranch at Aspen.

Today's best video

Today in pictures