The Serious Fraud Office is looking at contracts

The SFO is looking at contracts between BAE and travel agents Robert Lee International and Travellers World in connection with Saudi government deals.

The defence giant had previously issued a statement saying it did not believe it was part of the inquiry.

"BAE has today learned that it is now included in the investigation by the SFO," the company said.

"BAE Systems welcomes the SFO's investigation believing that it will put these matters to rest once and for all."

In a 3 November statement, BAE suggested it may have been the victim of a fraud.