British anti-fraud prosecutors intend to pursue a case against BAE Systems plc, the world's No2 defence contractor, on charges of corruption in dealings on foreign contracts worth hundreds of millions of pounds. One of those BAE dealings was with South Africa during the arms deal.

According to a report in The Guardian, the cases involve alleged secret payments on sales of a military radar to Tanzania; alleged bribes behind a Czech deal to lease Anglo-Swedish Gripen warplanes; payments allegedly made on a sale of two frigates to Romania; and £100-million in allegedly secret payments in a weapons deal with South Africa.

Prosecutors said yesterday they would seek permission from attorney general Patricia Scotland to pursue the case against BAE, which is Britain's largest manufacturer.

In a statement, BAE Systems said it "continues to expend considerable effort seeking to resolve, at the earliest opportunity, the historical matters under investigation by the [Serious Fraud Office]."

A senior British politician said the case could have serious implications "not just for BAE, but for Britain's defence capacity".

"The company is principal contractor in the programmes for the Eurofighter, the aircraft carriers and Joint Strike Fighter, which is to go on them, and many other significant procurement projects," said Menzie Campbell, former leader of the Liberal Democrat party.

In 2006, then prime minister Tony Blair called off a separate SFO investigation of BAE's dealings with Saudi Arabia in a multibillion-dollar plane and military equipment contract dating back to the 1980s. Blair said the investigation threatened national security and British jobs.

The US Justice Department continues to investigate the allegations that BAE Systems funnelled money to Saudi Prince Bandar bin Sultan to help win an $86-billion weapons deal.

Bandar and BAE have denied the allegations.

By Staff reporter and agencies