Sir Dick Evans, the chairman of BAE Systems, had close personal links with the arms firm executive accused of providing free holidays and gifts for a Ministry of Defence official, it was alleged last night.
Tony Winship, a former BAE employee, is the executive at the centre of allegations revealed in yesterday's Guardian that a BAE slush fund paid for a series of unauthorised luxury hotel stays for a civil servant in the MoD's arms sales unit.
If done as a reward or inducement for favours, this would be a serious criminal offence. The Serious Fraud Office launched inquiries into the allegations yesterday.
It was alleged last night that Mr Winship possessed the BAE chairman's personal mobile phone number. One associate said: "He would arrange meetings between Sir Dick and the head of the Saudi air force. He used to say 'If I have a problem, I can go to Dick Evans'."
When asked to comment, Sir Dick said: "You'll have to speak to the press office" and put down the phone.
BAE denies any wrongdoing and its press office refused to comment on the allegations about the relationship between Mr Winship and the company chairman.
There is no suggestion that Sir Dick had actual knowledge of the alleged gifts to the MoD civil servant, John Porter, paid for by BAE.
But the allegations suggest that Mr Winship was a trusted and influential figure within BAE. Within hours of the Guardian making inquiries about the payments, Mr Winship held discussions with Richard Coltart, BAE's spokesman, about the company's position. Mr Winship has not responded to invitations to comment.
The SFO is understood to have interviewed a key witness from the travel agency which made the hotel bookings, Travellers World. The SFO took possession of a large number of documents.
The Ministry of Defence has promised to cooperate with any SFO investigation into the allegations, it said yesterday.
The MoD police confirmed last night that the SFO had "been in touch with the MoD police fraud squad over the matters reported in the Guardian, and there will be discussions between the two organisations in the next few days".
In the past, officials at the MoD have been accused of a cover-up. The head of the SFO attempted as long ago as 2001 to persuade the MoD to investigate Mr Winship's activities.
Rosalind Wright, then SFO director, wrote to Sir Kevin Tebbit, the MoD permanent secretary, referring to allegations of possible personal complicity by Sir Dick in an alleged Â£20m slush fund making payments to Saudi officials.
But the MoD refused to investigate after Sir Kevin was assured by Sir Dick personally that the allegations were groundless and there was no need for further inquiry.
The alleged payments by BAE to the MoD official came to light following the collapse of the travel agency, Travellers World, and the takeover of the company's files by a liquidator.
In a document handed to the SFO yesterday, Travellers World alleges a series of large payments by BAE in the summer of 2001.
One is for Mr Porter and his family to go to the Test match at Lords that July.
The others are largely for Saudi military figures. They record what appear to be the remarkable lengths to which BAE was prepared to go to provide hospitality for officials of its most lucrative foreign customer.
Prince Turki bin Nasser, head of the air force, is provided with what is described as the "usual number of rooms and suites" at the Â£300-a-night Carlton Tower Hotel in London.
General Abdulmohsen al-Bassam, the one-time defence attache at the London embassy, got a Â£600-a-night suite for four at the Leonard Hotel in London for 10 days.
General Abdul Aziz al Maghrabi, an associate of the head of the air force, had no fewer than 20 British Airways plane tickets provided by BAE for a fortnight's jaunt to Italy for himself and his family. The booking was for 17 in club class, and the other three in economy.
Another group from Prince Turki's staff - "the Al Shablan family" - were flown to Paris on August 21, put up in four suites at the Claridge Hotel, and flown on to Riyadh on September 6.
The widow of another Saudi general, "Princess Haifa Al Sudairi and party", was flown in free of charge from Barcelona on July 28. She and her party were flown back to Barcelona a month later. On September 10 they returned from Spain and were flown back free of charge to Saudi Arabia.
The Saudi embassy in London said last night that it was making inquiries into the allegations.
None of these payments to Saudis were illegal at the time, although since February 2002, under new legislation, it has become an offence to offer inducements to foreign public officials.