London: Prime Minister Tony Blair said Tuesday that Britain needed Saudi Arabia s help in fighting terrorism, and that ending a bribery probe of Saudi arms deals with BAE Systems PLC was the right decision.

 
Blair has come under criticism for calling off the Serious Fraud Office s probe of allegations that BAE made unauthorized payments to members of the Saudi royal family to secure a contract in the 1980's.

In Paris, the OECD s international anti bribery panel said Tuesday that it has asked Britain to explain its reasons for halting an investigation into Saudi arms deals. Britain is a member of both the Organization for Economic Cooperation and Development and its working group on bribery, which is meeting this week at the international body's headquarters in Paris.

The panel was discussing the British investigation on Tuesday. An e mail from OECD spokeswoman Nicole Levourch to reporters said the 30 member body was �not in a position to make the letter public, nor would it publish a response from British officials that it received Friday.

 "Britain s Foreign Office said yesterday that the country s MI6 spy agency had shared the government s concerns over possible consequences for the public interest of continuing the Serious Fraud Office inquiry. Repeating his previous defenses of the decision, Blair told reporters at his monthly news conference, I think that had we proceeded with this investigation it would have significantly materially damaged our relationship with Saudi Arabia, that that relationship is of vital importance for us fighting terrorism including here in this country,"he said.

It would have done damage to a major strategic partnership right at the moment when we need that strategic partnership with the Middle East peace process, with Iraq and other issues.

"And, as I say, all of that leaves aside the fact that we would have lost thousands of U. K. Jobs," he said.

The Serious Fraud Office was investigating allegations that BAE ran a 60 million pound (92 million; US 110 million) slush fund offering sweeteners to officials from Saudi Arabia in return for lucrative contracts as part of the Al Yamamah arms deal in the 1980s. Al Yamamah, meaning the dove, was the name given to an agreement under which BAE supplied Tornado fighter jets and other military equipment to Saudi Arabia, which paid the British government with oil.

The full extent of the deal was never revealed but it was widely believed to be Britain s largest ever export agreement.

 The British Government sold its majority BAE stake in 1981 when BAE became a public limited company. News reports claimed that the Saudi government had told Britain to drop the probe or lose a 10 billion pound (15 billion; US 19.6 billion) contract to buy Typhoon Euro fighter jets, a deal that will supersede the Al Yamamah agreement.