Barclays And Dresdner Accuse Saudis

Under the deal, the two banks put up $225m each with Mizuho Financial Group and Saudi American Bank to build and lease back the bases near Jeddah. The Saudi government allegedly also promised to kick in $100m to the lender, which is seen as vital to the project. The funds have not been forthcoming.

The dispute has threatened to blow up into a full blown political crisis and it is believed that both the Saudi ambassador in London and the British ambassador in Riyadh have become involved.

Sources close to the situation are quoted as saying that the affair should be satisfactorily concluded shortly.