BAE Systems faces bribery charges BAE Systems faces bribery charges after the Serious Fraud Office (SFO) said it would ask the Attorney General to prosecute the firm. The SFO has been in long negotiations with BAE but these broke down after the sides could not agree on what the firm would admit or the fine it should pay. The case refers to allegations BAE paid millions of pounds to win contracts from several countries. BAE admitted last year it had not always met the top ethical standards. It added that it had been working with regulators to help the investigation "providing access to people, information and premises whenever requested". A separate investigation into BAE by the SFO was dropped in 2007 after it was decided that national security was at risk. In that case, the SFO ended its investigation into a giant 1980s arms deal BAE secured from Saudi Arabia. 'Explosive investigation' Whether you love or hate that BAE is a world leader in defence, it is the biggest manufacturer in the UK and is a significant part of the British economy Robert Peston BBC Business Editor The latest SFO investigations are into contracts BAE won from countries including Tanzania, the Czech Republic, Romania and South Africa. The BBC understands that the SFO wanted to strike a deal that would involve BAE pleading guilty to charges of corruption and agreeing to pay a substantial sum in compensation - between £500m and £1bn - however no deal was done. BBC business editor Robert Peston said the continuing probe was "the most explosive investigation into a British company that I have ever encountered". He added that, while BAE would like to settle the case through a plea bargain, its management had a legal duty not to hand over cash or damage the reputation of the firm unless they were advised by their own lawyers that the SFO had an overwhelming case. THE STORY SO FAR... <LI class=bull>Allegations that BAE contracts have been won through bribery payments are not new <LI class=bull>The biggest probe focused on a £43bn contract to supply more than 100 fighter jets to Saudi Arabia. The deal began in 1985 but a National Audit Office investigation was suppressed in 1992 <LI class=bull>The SFO launched an investigation in 2004 into the allegations - including BAE running a "slush fund" that offered sweeteners to Saudi royals and their intermediaries in return for lucrative contracts <LI class=bull>This was dropped two years later by Tony Blair after political pressure from the UK and Saudi Arabia. BAE always denied any wrongdoing Criminal charges would be brought under the 2001 Prevention of Corruption Act, but conviction would be decided by a judge without needing a crown court trial in front of a jury. A final decision on whether to proceed with criminal proceedings will have to be made by the Attorney General Baroness Scotland. It will take several weeks to prepare the papers for the Attorney General - and it is possible that the sides could still reach an agreement in that time. The firm is the UK's largest manufacturer - making everything from British Army kit to warships and planes. It has about 105,000 employees worldwide, including about 32,000 in the UK with customers in more than 100 countries.