AN anti-bribery watchdog has demanded an inquiry into why the government ordered a fraud probe into BAE Systems to be dropped.

Defence giant BAE saw its value increase by almost £1billion when the Serious Fraud Office dropped an investigation into the firm's dealings with the Saudi government.

Locally it had been feared jobs could be threatened as the Middle Eastern country had reportedly threatened to pull out of a deal to buy 72 Eurofighters, parts for which would be made at Samlesbury.

Now the Organisation for Economic Co-operation and Development has written to the government demanding an explanation.