Saudi Arabian sources yesterday played down talk of a rift with BAE Systems, after speculation that the Kingdom was about to ditch plans to spend £10 billion on British-made fighter jets in favour of rival French aircraft.

A senior Saudi source insisted that the country was committed to its 30-year relationship with Europe’s largest defence company, but admitted that talks over the purchase of 72 Eurofighter Typhoon jets had been “delayed”.

“This isn’t a crisis situation, nothing’s been cancelled,” the source said. “There are just some issues that need to be sorted out before things can proceed.”

The comments followed reports that Saudi Arabia was preparing to end its deal with the British Government in the next few days and buy up to 36 Rafale fight jets from Dassault, the French company, instead.

Yesterday Mike Turner, chief executive of BAE, fuelled fears that the deal was in danger when he said: “Negotiations between the two sides have not moved apace since Ramadan ended.”

He hinted that any difficulty was between the governments rather than at BAE. “We do need to recognise that this is a government-to-government contract,” Mr Turner said.

The Saudi Royal Family is thought to be annoyed by a continuing investigation by the Serious Fraud Office (SFO) into allegations that BAE set up a £60 million slush fund to bribe members of the family. The investigation started three years ago and a completion date has not been given.

The Saudi source said that there was no intention of issuing any kind of threat to BAE or Britain. “This stirring is being driven from London,” he said. The British Government said almost a year ago that Saudi Arabia would buy 72 jets to replace Tornado aircraft that the Kingdom had bought from BAE as long as 20 years ago. In total, BAE has sold about 50 Hawks, 50 Pilatus and 150 Tornadoes to the Saudis over a long relationship that includes providing training facilities and support.

Under the most recent deal, on which a memorandum of understanding was signed just two months ago, the UK, Germany, Italy and Spain would supply parts for the new aircraft, which would be assembled by BAE.

The British Government has been the lead European negotiator on the deal. Yesterday the Foreign and Commonwealth Office said it was unable to comment directly on the state of talks with Saudi Arabia because of the SFO investigation.

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