Lord Woolf 'heads arms deals probe'

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An ethics committee chaired by Lord Woolf is to look into how the defence giant conducts its arms deals, according to the BBC.

The revelation comes after a row over alleged kickbacks to Prince Bandar bin Sultan.

BAE Systems has been accused of paying bribes of £1 billion to the Saudi prince in return for setting up the £40 billion Al Yamamah arms deal in the 1980s.

A BAE Systems spokeswoman declined to comment on the BBC story.

She said: "All we are saying is that the board regularly reviews policies and process related to international business practice."

On Sunday, Chancellor Gordon Brown distanced himself from the row over the arms deal, saying he knew nothing of the alleged kickbacks.

The Ministry of Defence is alleged to have had full knowledge of the arrangements, while Attorney General Lord Goldsmith was forced to deny claims last week that he hid them from anti-bribery investigators.

Asked whether he knew about the alleged payments, at a Labour leadership hustings in Oxford, Mr Brown said simply: "I had no knowledge of those things."

His comments follow Tony Blair's attempts to fend off demands for a new inquiry into the deal, which was struck by Margaret Thatcher. The Prime Minister insisted that thousands of British jobs would have been lost if a previous inquiry by the Serious Fraud Office (SFO) had been allowed to continue.