The Cape High Court on Tuesday rejected a bid by Economists Allied for Arms Reduction to block the government's participation in a multibillion rand Airbus programme.

However Judge Deon van Zyl did say the public were justifiably concerned at South Africa's spending on arms when housing, education and health services needed improvement.

"The public wants to know why huge amounts are being spent, what the need is for this expense when there are so many other needs to be addressed," he said.

His decision came only a day before the deadline for government to sign a "declaration of intent" to take part in the design and manufacture of the giant military aircraft.

It also coincided with a call by Democratic Alliance leader Tony Leon for parliament to be recalled to debate what he called the "highly unorthodox and expensive arms deal".

"Government must not be allowed to spend taxpayers' money in a new arms deal which apparently has not followed standard procurement procedures, and has not been put out to tender and has not been considered by Parliament," Leon said.

The government announced last week it had accepted an invitation from Airbus Military for South Africa to participate in the A400M multi-role mission transport aircraft design and manufacture programme.

In return, the government had committed to procure and take delivery of between eight and 14 aircraft as the programme matured between 2010-2014.

The craft would play an important role in peacekeeping operations.

ECAAR representative Terry Crawford-Browne, who argued his own case on Tuesday, had sought an order restraining the government from "signing and concluding supply contracts" for the aircraft.

He said the deal was "clearly economically irrational", as it did not address any plausible threat to South Africa, and did not meet the constitutional requirements for fair and cost-effective government procurement.

Although the deal was described as an "economic partnership programme", the arrangements clearly conformed to what were internationally known as offsets.

Offsets were banned by the World Trade Organisation because of their distortionary effect, he said.

"They are a scam promoted by arms companies to promote the proliferation of weapons particularly to Third World countries," he said.

"The country is again being rushed into an extremely dubious scheme at enormous cost."

However, secretary for defence January Masilela said in a replying affidavit that the government's main intention in the programme was not to acquire the aircraft but to participate in their design and manufacture.

Because the government was only about to sign a declaration of intent, a bid to interdict the signing of "supply contracts" was premature.

He said the programme did not have offsets because South Africa would be not the acquirer of weapons, but the manufacturer. South Africa developed a significant skills base in the aerospace industry in the 1970s and 1980s. Without growth in the industry, these skills were in danger of being lost.

"This is not an acquisition programme or venture which requires tenders and observance of section 217 of the Constitution," Masilela said.

Judge Van Zyl said Crawford-Browne and ECAAR had not made out a case that the government was acting irrationally.

Though the public had a right to be upset by spending on luxuries or unnecessary items when there were so many other needs to be addressed, ECAAR could not ask the court to decide on matters of national policy.

Though he had great understanding for ECAAR and Crawford-Browne's concern in the matter, the request for an order against supply contracts was "totally premature", since the supply would take place only from 2010.

What the situation in South Africa would be then was total speculation, and the courts could not make decisions on the basis of speculation.

He said that in view of the public interest in the matter he would not award costs against ECAAR.

Crawford-Browne said afterwards he was "obviously disappointed". He did not think he would appeal.

"I think we made a point that there is public concern about this expenditure," he said.

Crawford-Browne and ECAAR earlier this year lost a bid to overturn the government's previously-announced arms acquisition programme.

With acknowledgements to Ben Maclennan, Sapa and Independent Online.