Britain's Guardian daily said on Tuesday that Prime Minister Tony Blair and Defence Minister John Reid had both travelled to the Saudi capital in pursuit of the agreement, which is worth up to ?40 billion ($71 billion).

 

Blair went on 2 July on the way to Singapore, where Britain was bidding for the 2012 Olympics, and Reid followed three weeks later for a two-day visit.

 

The newspaper said Britain's Defence Minister Geoff Hoon sought to persuade Prince Sultan, the crown prince, to re-equip his air force with a European fighter plane called the Typhoon, which is largely manufactured by British defence and aerospace giant BAE Systems.

 

Stalled negotiations

 

At the same time, the Guardian quoted unnamed defence, diplomatic and legal sources as saying: "Negotiations are stalling because the Saudis are demanding three favours."

 

Blair (L) travelled to Saudi
Arabia to pursue an arms deal 

The first request was that Britain expels two anti-Saudi dissidents - Saad al-Faqih and Mohammed al-Masari, according to the newspaper.

 

Al-Faqih, who has asylum in Britain, is accused of being involved in a plot to assassinate King Abdullah.

 

The Guardian said he denied support for violence, and it noted that the Foreign Office does not believe him to be a danger to the country.

 

Al-Masari apparently fled Saudi Arabia in 1994 for Britain.

 

Resuming flights

 

The second request is for British Airways to resume flights to Riyadh, which have been cancelled because of fears of attacks by extremists.

 

Finally, Saudi Arabia asked that a corruption investigation implicating the Saudi ruling family and BAE should be dropped.

 

The Guardian said Crown Prince Sultan's son-in-law Prince Turki bin Nasr was at the centre of a "slush fund" probe by the Serious Fraud Office.

 

Neither Blair's offices in Downing Street nor the Ministry of Defence could immediately comment on the report.