UK Edition
Margaret Thatcher stopped Al-Yamamah arms deal going to French with secret personal 'tactical arguments' meeting with Saudis
Secret diplomacy by Margaret Thatcher helped land the UK’s biggest arms deal, and prevented the contract for fighter aircraft going to the French, according to newly released files.
Foreign office files released by the National Archives at Kew in West London detail the delicate diplomatic tightrope the Prime Minister walked to secure the sensitive contract, and the efforts made to keep the negotiations under wraps.
Documents show that in April 1985, Mrs Thatcher made a stop over in Saudi Arabia that helped seal the controversial Al-Yamamah deal on her way back from a tour of south-east Asia.
The Saudis had been veering towards buying French aircraft, but Mrs Thatcher lobbied hard and undertook a series of negotiations with the Saudi royal family.
The Al-Yamamah deal proved highly controversial from the moment it was signed by Saudi defence minister Prince Sultan and then defence secretary Michael Heseltine in 1985.
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 in return for lucrative contracts.
Files show Mrs Thatcher was invited by Prince Bandar to meet King Fahd in Riyadh, a trip only backed by Mr Heseltine on the understanding there was certainty it could clinch the deal.
Sounding out the invitation behind closed doors, Mr Heseltine's private secretary, Richard Mottram, wrote to Mrs Thatcher's foreign policy adviser, Charles Powell: "It seems unlikely that Prince Bandar would seek to engineer such a meeting unless something positive was likely to come out of it: otherwise he runs the obvious risk of embarrassing both the prime minister and King Fahd."
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 more explicit.
"Tackling the King in person is probably the only way of smoking the Saudis out."
The government tried to keep discussions from the press, by admitting only that the Prime Minister would "take opportunities as they arise to promote major export projects" if officials were pressed for information on a Tornado deal.
But, behind the scenes, detailed arguments to secure the contract were being planned.
A confidential document on the meeting outlined "tactical arguments" to secure an "early and favourable decision to purchase Tornado IDS and Hawk training aircraft", including the Tornado's favourable price against the F15, its superiority in an offensive/tactical support role and a gentle threat that prices could not be held indefinitely.
The meeting was officially touted as a discussion of political developments in the Middle East, but it was accepted that with 20 journalists invited on the trip it was likely the visit would be mainly presented as being about the Tornado deal.
Another briefing note urged Mrs Thatcher to let the king bring up the deal first during their meeting.
An official record of the meeting between Mrs Thatcher and King Fahd on April 14 1985 made no mention of discussions over Tornados or an arms deal.
But in a letter to the king the following day, the prime minister mysteriously wrote: "I was glad that we were able to discuss a further matter privately over lunch.
"I look forward to receiving your majesty's personal envoy soon, in order that we may conclude this matter successfully."
That September an agreement in principle was signed for the UK to supply Tornado, Hawk and PC9 aircraft to Saudi Arabia.
A 1992 report by the National Audit Office into the deal was suppressed over fears it may offend the Saudis - an unprecedented step - 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 £286 million.
