Citing an e-mail obtained under US freedom of information legislation, the Guardian reported that the British Ministry of Defence's top civil servant was told personally about the accusations.

The e-mail said that the civil servant, Sir Kevin Tebbit, had given a "sharp response" to the US State Department rejecting the allegations, the left-leaning newspaper said.

According to the report, BAE was accused of attempting to bribe two senior Czech politicians last year to win a deal worth one billion poundsbillion euros, 1.6 billion dollars) to supply Gripen fighters made jointly by BAE and Swedish firm Saab.

BAE said Thursday it rejected the allegations out of hand, saying they had been made before and that the Guardian report contained no new evidence.

"These allegations were groundless when first raised, they were groundless when repeated, there are still groundless when repeated by the Guardian," said spokesman Richard Coltart.

The BAE-Saab consortium was awarded the contract in April 2002, but beforehand rival firms vying for the deal, including US aviation giant Boeing and Lockheed Martin, pulled out amid accusations it was biased.

In the end, the Czech government cancelled the order four months later as the country faced a vast bill to clean up that summer's floods, the worst in living memory.

WAR.WIRE