Nick Clegg, leader of the Liberal Democrats has urged the government to resume an investigation into bribery allegations surrounding a £43 billion pound arms deal between BAE Systems and Saudi Arabia.

On Thursday the High Court ruled that the government had acted unlawfully when it suspended an investigation by the Serious Fraud Office (SFO) in December 2006.

BAE has been accused of bribing Saudi officials to secure contracts for the arms deal.

The government ended the investigation on the grounds that it was not in the public interest because it could damage relations with a key ally in the fight against terrorism.

The High Court judge Lord Justice Moses criticised the government for what he called an abject surrender to a foreign government.

Nick Clegg, speaking to the BBC's Newsnight programme said, The fraud office needs to now proceed with the original investigation which was suspended.

Second, I think we do want an independent inquiry into the way in which political pressure, inappropriately in my view, was brought to bear on the director of the Serious Fraud Office.

The government said in a statement, The SFO are carefully considering the implications of the judgement and the way forward.

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