Britain faces losing a £10bn arms contract with Saudi Arabia, unless it halts a bribery investigation into the kingdom's arms trade.

The Saudi government has given the UK a 10-day ultimatum to scrap a Serious Fraud Office probe or lose the deal to supply 72 Eurofighter jets, supporting 50,000 jobs, according to the Daily Telegraph.

The report comes after the Guardian revealed that secret payments of millions of pounds from BAE Systems, which manufactures the plane, have been found in Swiss bank accounts linked to Wafic Said, a billionaire arms broker for the Saudi royal family.

Last Monday the Saudi national security council secretary general visited the French president, Jacques Chirac, amid fears France may win the contract to supply fighter jets.

The Telegraph reports that Mr Chirac has already travelled to Saudi Arabia twice to push the deal.

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