16 January 2007David Leigh, Richard Norton-Taylor and Rob Evans
Britain's secret intelligence service, MI6, has challenged the government's claim that a major corruption inquiry into Saudi Arabian arms deals was threatening national security.
The attorney general, Lord Goldsmith, told parliament before Christmas that the intelligence agencies "agreed with the assessment" of Tony Blair that national security was in jeopardy because the Saudis intended to pull out of intelligence cooperation with Britain. But John Scarlett, the head of MI6, has now refused to sign up to a government dossier which says MI6 endorses this view.
Whitehall sources have told the Guardian that the statement to the Lords was incorrect. MI6 and MI5 possessed no intelligence that the Saudis intended to sever security links. The intelligence agencies had been merely asked whether it would be damaging to UK national security if such a breach did happen. They replied that naturally it would.
The issue has now come to a head because ministers are under pressure at an international meeting today to justify why they terminated an important corruption investigation into the arms company BAE Systems.
In a controversial move last month, Tony Blair ordered the Serious Fraud Office inquiry to be halted, and said he took the responsibility for doing so, after BAE lobbied him that it might otherwise lose a lucrative Saudi order for more arms sales. The decision was condemned by MPs and anti-corruption campaigners, and is now the subject of an inquiry by the Organisation for Economic Cooperation and Development (OECD), which is responsible for rooting out corruption around the world. Britain signed up to its anti-bribery convention which made the payment of bribes a specific criminal offence under UK law in 2002.
The OECD has demanded an explanation of the government's decision to abruptly close down an inquiry which was investigating secret payments made to Saudi royals.
Whitehall officials will be questioned by 35 other governments at the Paris meeting, which can "name and shame" Britain if it finds against them. As part of the government's preparations to provide a justification to the OECD, MI6 was asked to sign up to a dossier which made the claim that MI6 "endorsed" Mr Blair's national security claim, according to those who have seen it.
When it was sent to MI6 headquarters last week, Mr Scarlett, refused. Officials made it clear there were "differences" between the intelligence agencies and the government over the language used by Lord Goldsmith. A source said that Lord Goldsmith's claims to parliament in December "contained quite a degree of conjecture". One official said there was "nothing to suggest" that the Saudis had actually warned "if you continue with this inquiry, we will cut off intelligence".
Asked if the security and intelligence agencies objected to claims that they endorsed the attorney general's statement, an official replied: "Exactly." The language has now been changed.
The dispute echoes the intelligence row about "sexing-up" the Iraq arms dossier, when Mr Scarlett, then head of the Joint Intelligence Committee, was persuaded to endorse false government claims that Saddam Hussein possessed weapons of mass destruction. Sources close to the intelligence agencies say Mr Scarlett was unwilling to again provide cover for ministers by endorsing another set of controversial government claims.
Yesterday, Elfyn Llwyd, Plaid Cymru parliamentary leader, said: "I am glad that the security services have stuck to their guns and told the truth. This government is getting less and less credible every day".
Lord Goldsmith's version of events has also caused a breach with the SFO. Its director, Robert Wardle, says his team found significant evidence in the Saudi arms inquiry and was hoping to find more from Swiss banks. Lord Goldsmith attempted to persuade MPs that the SFO had found no evidence to justify prosecutions and never would.
