How Mrs Thatcher helped Fylde aircraft makers

In April 1985 Mrs Thatcher visited Saudi Arabia on her way back from a tour of south-east Asia, a stopover that helped clinch the controversial Al-Yamamah contract for Fylde -built Tornado aircraft.

The Saudis had been leaning towards buying fighter jets from the French, but Mrs Thatcher lobbied hard on behalf of British industry and undertook a series of negotiations with the Saudi royal family to press the deal home.

Files released by the National Archives in London, reveal the delicate tightrope the prime minister had to walk.

She was invited by Prince Bandar to meet King Fahd in Riyadh, a trip supported by then-defence secretary Michael Heseltine to clinch a deal for Tornado jets.

Sounding out the invitation behind closed doors, Mr Heseltine’s private secretary, Richard Mottram wrote to Mrs Thatcher’s foreign policy adviser, Charles Powell: “It seems unlikely that Prince Bandar would seek to engineer such a meeting unless something positive was likely to come out of it: otherwise he runs the obvious risk of embarrassing both the prime minister and King Fahd.”

A confidential document on the meeting outlined “tactical arguments” to win the deal to to buy Tornado and Hawk training aircraft”, including the Tornado’s favourable price against the F15, its superiority in an offensive/tactical support role and that prices could not be held indefinitely.

Another briefing note urged caution over how Mrs Thatcher should bring up discussions.

It said: “I feel bound to advise that she should aim to give the king himself the opportunity to raise the matter first, and that it would not be in our interests to appear to pressure the Saudis unduly at this point.”

An official record of the meeting between Mrs Thatcher and King Fahd on April 14 1985 made no mention of discussions over Tornados or an arms deal. But, that September an agreement in principle was signed to supply Tornado, and Hawk to Saudi Arabia.

The deal was later investigated by the Serious Fraud Office due to allegations of illegal payments made to go- betweens but the action was dropped. However, the US Department of Justice launched a probe and in 2010 BAE Systems agreed to pay $400m.