Nairobi — Britain's Serious Fraud Office is set to launch a probe into the terms and conditions under which the Tanzanian government bought the Watchman Air Traffic Control system and if there were any issues of bribery involved.

The multi-million dollar system, which critics said was primarily designed for military use was designed and built by the UK company BAE.

The deal went through despite the opposition of Britain's then Secretary of State for International Development Clare Short allegedly under instructions from the then Prime Minister Tony Blair.

On October 1, it was announced that the SFO would begin what promises to be the biggest corporate corruption prosecution in British legal history.

It is asking the Attorney-General for the go-ahead to prosecute BAE for bribery under the 2001 Prevention of Corruption (Amendment) Act.

Ms Short spoke out about the deal in a heated parliamentary debate at the time and she told the BBC she was convinced it was a corrupt deal.

"I was really shocked by the behaviour of British Aerospace and the collusion of all these government departments in such a gross and disgraceful project.

"Even when I got all the information and took it to the highest levels of the government, I still couldn't stop it." Ms Short says that a number of factors convinced her that this was a corrupt deal.

She says that the deal had been proposed 10 years earlier but had been blocked by intervention by the World Bank and the UK's Overseas Development Administration, the precursor to the Department for International Development.

"Then it came back as half a project. The thing was so grubby from beginning to end and, of course, it was so old that the technology was overtaken. Tanzania didn't have military aircraft. It needed civil air traffic control improvement in order to improve its tourist industry."

Other UK MPs, notably the Liberal Democrats then Overseas aid spokesman Norman Lamb also spoke out about the issue. And in October 2001, a report by the International Civil Aviation Organisation, a part of the United Nations, said:

"The system as contracted is primarily a military system and can provide limited support to civil air traffic control purposes. The purchase of additional equipment... would be required to render it useful for civil air traffic control. However, if it is to be used primarily for civil air traffic control purposes, the proposed system is not adequate and too expensive."

It has also now been revealed that at the same time in 2001, Clare Short had agreed a £35m ($55.6 million) education aid package for Tanzania but virtually the whole sum was in effect gobbled up in the air traffic control system deal.

Ms Short said that the deal had gone through because the UK Prime Minister had insisted the necessary export licence be given.

"Tony was absolutely dedicated to all arms sales proposals," she says. "Whenever British Aerospace wanted anything, he supported them 100 per cent. He didn't seem to understand that there are matters of principle concerned. He had also been duped and bought the argument that it's always good for the British economy, which is absolutely not so."

In 2006 Mr Blair made one of the most controversial decisions of his premiership, helping to force the closure of an inquiry by the Serious Fraud Office into allegations that British Aerospace had paid bribes to win a lucrative arms contract with Saudi Arabia.

"I stick by that," he said six months later, "and the idea frankly that such an investigation could be conducted without doing damage to our relationship is cloud cuckoo land."

The controversy raised its head again six years later when in January 2007 it was reported that $12 million had been paid into the Swiss bank account of a middle man involved in the Tanzanian deal by a BAE subsidiary, Red Diamond.

The payment amounted to approximately a third of the value of the contract and the middle man concerned was described as an agent. BAE is reported to have refused to discuss the matter.

Norman Lamb described the deal as "morally indefensible" and told the BBC it was "outrageous that it's gone on for so many years. We had the inquiry launched by BAE Systems, in the name of Lord Woolf, which was a complete whitewash. What we need is decisive action by the SFO, to make it clear that that culture is no longer acceptable. I also believe we also need a public inquiry into how this export licence was allowed to be granted."

A spokesman for BAE says the company has co-operated with regulators to help conclude an inquiry now in its sixth year, but it clearly looks likely to contest corruption charges.