Reed Elsevier, the publisher and exhibitions group, will be challenged tomorrow by Campaign Against Arms Trade (CAAT) at its annual general meeting over its failure to sell its controversial defence exhibitions business.

Reed Elsevier last year pledged to offload Reed Defence Exhibitions, the owner of the Defence Systems & Equipment International (DSEi) - one of the world's largest arms fairs, by the end of 2007.

The decision by the firm to sell was driven by shareholders, staff at its medical publication The Lancet and authors, who don't want the London Book Fair (which Reed owns) to be associated with an arms exhibition.

However, sources insisted that a sale was a matter of weeks away, with private equity-owned Clarion Events, the organiser of The Baby Show and the London International Horse Show at Olympia, the preferred bidder.

The division is understood to be valued at around £20 million.

CAAT has been one of the most outspoken protesters. Members of the Campaign Against Arms Trade (CAAT) have acquired shares in Reed Elsevier for the purpose of campaigning. This gives them access to the company's AGM on Wednesday.

In 2006, 13 leading writers, including Ian McEwan, A.S Byatt, Nick Hornby, Will Self and Arabella Weir, called for the London Book Fair to end its links with a company connected to the global arms trade.

The writers said the arms fair's organisers had invited "military buyers from some of the world's most violent and repressive regimes, including Colombia, Indonesia, Saudi Arabia and China."

Some critics said that the group's role in organising arms fairs undermined The Lancet's attempts to improve health.

The cost of the event to the taxpayer has also been a subject of controversy. In 2005, the event reportedly took place at a cost to taxpayers of £3,760,250, with organisers declining a Metropolitan Police request to contribute to the overall cost.

Sir Crispin Davis, the chief executive of Reed Elsevier, said in June of last year that, "it has become increasingly clear that growing numbers of important customers and authors have very real concerns about our involvement in the defence exhibitions business."

Although Sir Crispin said that "our defence shows are quality businesses which have performed well in recent years," he added they were "no longer compatible with Reed Elsevier's position."

The group said at the time that it planned to pull out of the defence industry by the end of the year.

Last year, the Joseph Rowntree Charitable Trust sold its shares worth £2 million in Reed Elsevier because of its continued work in defence exhibitions. The move followed F&C Management’s decision to remove Reed Elsevier from its list of approved ethical investments.

The biannual arms exhibition last took place at London's Excel Centre in September.

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