BAE Systems said today it was not "moving forward" at present on finalising a deal to supply Saudi Arabia with 72 Eurofighter Typhoon jets.
Europe's largest defence firm said negotiations between the two sides had "not exactly moved apace", and that chief executive Mike Turner had told the Financial Timesthat his company could not speak on behalf of the two governments.
"But I do know we are not currently moving forward on finalising the Typhoon contract," a BAE spokeswoman confirmed Mr Turner as saying.
The comments came a day after BAE shares fell 3.1 per cent on reports it might lose the Eurofighter deal to French aerospace group Dassault if a fraud investigation was extended to the Saudi royal family.
Shares in BAE were trading 1.0 per cent lower at 387.25 pence earlier today.
The Sunday Telegraphsaid the Saudi government was set to tear up its Eurofighter Typhoon agreement with Britain and give the jets contract to France if Britain's Serious Fraud Office (SFO) opened Swiss bank accounts allegedly linked to members of the Saudi royal family as part of a long-running investigation.
Mr Turner reiterated in the Financial Timesthat his firm had done nothing wrong. "We don't want to interfere with the judicial process, and politicians clearly cannot do that, but we do want to see a resolution of the SFO investigation. It is damaging for our business," he said.