The Serious Fraud Office has ended its corruption inquiry into a £6bn fighter planes deal with Saudi Arabia.

Attorney General Lord Goldsmith said the SFO was "discontinuing" its investigation into Britain's biggest defence company, BAE Systems.

The probe had related to the Al Yamamah arms deal with Saudi Arabia. BAE has denied any wrongdoing.

Lord Goldsmith told the Lords he thought that a prosecution "could not be brought".

He said the decision had been made in the wider public interest, which had to be balanced against the rule of law.

Lord Goldsmith also told peers that Prime Minister Tony Blair had agreed that the continuation of the investigation would cause "serious damage" to relations between the UK and Saudi Arabia.

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