Representatives on Thursday filed notice in the Cape High Court that the state would oppose a law suit "on behalf of all poor South Africans" lodged by anti-arms activist Terry Crawford-Browne and the South African branch of the international NGO Economists Allied for Arms Reduction (ECAAR), which he heads. Crawford-Browne approached the Cape High Court on November 21 for an order declaring the deal null and void and that all related foreign loan agreements be set aside.

"The purpose of that would be to collapse the deal," he said as he filed the documents. President Thabo Mbeki and Finance Minister Trevor Manuel were listed as the first and second respondents. Other respondents are the national government of South Africa, National Assembly Speaker Dr Frene Ginwala, Public Protector Selby Baqwa, National Director of Public Prosecutions Bulelani Ngcuka and Auditor-General Shauket Fakie. They had until Thursday to notify ECAAR's lawyers if they intend to oppose the application.

The law suit came less than a week after Fakie, Baqwa and Ngcuka unveiled a long-awaited report on the probe into allegations of irregularities surrounding the deal. The investigation found no "improper or unlawful conduct" by the government, and no grounds to suggest its contracting position was flawed. The application argues that government acted irrationally and unconstitutionally by entering into the deal, and that Manuel had acted unlawfully when entering into the underlying loan agreements. Crawford-Browne - ECAAR South Africa's chair - argues there is no foreign military threat to the country and that issues of poverty demanded priority over military spending.

The price of the deal to buy the submarines, fighter aircraft, fighter trainer aircraft, helicopters and corvettes was originally set at R30,3-billion, but with exchange rate and financing cost fluctuations it is now estimated it will cost taxpayers closer to R70-billion. He said that given the depreciation of the rand over the past 40 years, the final cost could be between R250-billion and R300-billion. "We are only in year two, and the cost of the deal has already escalated to R66-billion. No-one knows what they will be (eventually), not even the minister of finance. "This means there's no money available for meeting socio-economic needs in terms of the Bill of Rights, and the result could well be social anarchy, as is the case in Zimbabwe."

The application says parliament, which in 1998 approved the defence review recommending the arms purchases, never agreed to loans or borrowings to finance the deal. It was therefore unlawful for the executive to approve the loans without a resolution from parliament. It also claims that the R104-billion in "offsets" from the deal are "nothing more than a scam of the arms dealers".