Two British judges ruled that the SFO caved in too easily in the face of threats from Saudi Arabia that the kingdom would withdraw business and stop sharing intelligence with the UK if the investigation was allowed to continue.

In December 2006, SFO director Robert Wardle, decided to abandon the investigation into alleged bribery in negotiations surrounding the £43bn ($85bn) Al-Yamamah arms deal, which was agreed by the Thatcher government in 1985.

The 2006 decision, urged by the then UK Prime Minister Tony Blair, was widely condemned and provoked the current legal challenge.

The judges said that the SFO’s retreat “merely encourages those with power, in a position of strategic and political importance, to repeat such threats, in the knowledge that the courts will not interfere with the decision of a prosecutor to surrender”.