PARIS, Jan 4: An international anti-bribery watchdog has asked Britain to explain why it halted a corruption inquiry into a multi-billion-pound defence deal with Saudi Arabia, officials said on Thursday.

Britain's Serious Fraud Office (SFO) was looking into deals involving Saudi officials and people working for BAE Systems, but after nearly two years of work the investigation was suddenly dropped last month.

An anti-bribery committee at the Paris-based Organisation for Economic Cooperation and Development (OECD) said it had sent a letter to London before Christmas demanding to know why the inquiry was stopped.

A Foreign Office spokesman confirmed they had received a letter and said the ministry would respond in due course.

Lord Goldsmith, the government's top lawyer, said on Dec 14 that Prime Minister Tony Blair, British security service chiefs and the Saudi ambassador to London believed prolonging the Saudi investigation could undermine national security.

But an OECD official said the 1997 OECD anti-bribery convention signed by Britain only allowed criminal proceedings to be halted on the grounds of lack of evidence.

Mark Pieth, who chairs the OECD bribery group, said he had `serious concerns’ about Britain's reasons for halting the probe and feared a lack of respect for the separation of powers.

“It's the executive, the attorney-general (justice minister) intervening in a criminal proceeding for possibly political reasons,” said Pieth, who is a criminal law professor at Switzerland's Basel University.

`JAMES BOND’ EXCEPTION: In a telephone interview, Pieth said the OECD committee also had serious doubts about Britain invoking a `public interest’ clause, adding that if by `public interest’ Britain meant its `economic interests’, it would be in breach of the convention. Defence contracts could only be excluded from the convention's terms in extreme cases, he said.