London ­ Former British prime minister Tony Blair demanded the cancellation of a government fraud investigation regarding BAE Systems and Saudi Arabia in part because he feared it would jeopardise a lucrative Saudi arms deal, a British newspaper reported at the weekend.

The Guardian newspaper printed more than 30 pages of government memos and letters showing comments Blair and members of his cabinet made before succeeding in persuading the attorney-general, Lord Goldsmith, to cancel the Serious Fraud Office investigation.

The memos and letters, marked "secret", "personal" and "confidential", emerged on Friday during preliminary high court hearings, The Guardian reported.

The court is considering a complaint filed by anticorruption campaigner The Corner House challenging the legality of the government's decision to stop the office's investigation.

In December last year Goldsmith cancelled an investigation by the Serious Fraud Office into a BAE Systems arms deal with Saudi Arabia.

However, Blair allowed an investigation of the company's past relations with the South African government to continue, which elicited a strong reaction from President Thabo Mbeki, whom accused Blair of hypocrisy.

In February, Mbeki said at the World Economic Forum in Davos that Britain's decision had left SA tainted, and he said corruption inquiries focused disproportionately on African countries rather than the western companies on the other side of the equation.

Mbeki said he had received a request for information from the British authorities, and had ensured all their demands were met, even though he strongly disputed the basis for the inquiry.

BAE won part of the R20bn contract to supply SA with 24 Hawk jet trainers as part of the arms deal. There were reports that the UK's Serious Fraud Office was investigating businessman Fana Hlongwane, former adviser to the late former defence minister Joe Modise, for allegedly receiving payment from BAE.

In his book, After the Party, former African National Congress (ANC) MP Andrew Feinstein claimed Mbeki was involved in the ANC's blocking of a parliamentary investigation of alleged bribery by BAE and other weapons firms, and that a deal for fighter jets was sealed after an informal chat and with no bids on the table. The ANC denies this.

In a letter to Lord Goldsmith on December 8 last year, Blair demanded that Goldsmith stop the investigation, the Guardian reported. He was concerned about the "critical difficulty" in negotiations with Saudi Arabia over a contract for Typhoon fighters and "a real and immediate risk of a collapse in UK-Saudi security, intelligence and diplomatic co-operation".

Blair, who stepped down as British prime minister this year, has taken responsibility for halting the probe, saying it threatened national security interests.

He acknowledged that there were also commercial interests at stake, but said those were not behind the decision. But the documents indicate Blair was concerned that Saudi Arabia would be angered by the investigation and cancel the Typhoon deal.

The fraud office was investigating allegations that BAE ran a £60m "slush fund" offering sweeteners to Saudi officials in return for lucrative contracts as part of the arms deal in the 1980s.

BAE has denied the accusations. Prince Bandar bin Sultan, former envoy to the US and now head of Saudi Arabia's National Security Council, has also denied that he profited from the deal.

The Guardian said Blair personally vetoed a proposal that BAE could plead guilty to lesser corruption charges as this was "unlikely to reduce the offence caused to the Saudi royal family".

With acknowledgements to Thomas Wagner, Sapa-AP and Business Day.