Serious Fraud Office director Richard Alderman faced a High Court challenge today over his decision to agree a plea bargain with BAE Systems.
Two campaign groups, The Corner House and Campaign Against Arms Trade, have applied for an injunction to block the move and called for a judicial review.
They strongly criticised a negotiated settlement announced earlier this month that brought to an end years of legal wrangling and damaging allegations.
The Serious Fraud Office (SO) agreed to drop claims of bribery if BAE admitted accounting offences linked to the sales to Tanzania and pay a £30 million fine.
Solicitor Jamie Beagent, of Leigh Day & Co, said papers have been lodged claiming Mr Alderman acted unlawfully.
He said: "The plea bargain announced on February 5 has unsurprisingly attracted a great deal of public criticism.
"The fine BAE have agreed to does not reflect the seriousness of the many allegations it faced.
"The SFO's decision seems entirely at odds with its own prosecutorial guidance and our clients will be asking the courts to review the legality of that decision."
The SFO has been investigating allegations of bribery and corruption by BAE for more than six years.
In 2006, officials dropped an inquiry into bribery allegations relating to the Saudi Arabian royal family.
Earlier this month a joint settlement between the SFO, the US Department of Justice (DoJ) and the company was agreed.
Under the deal, BAE must pay 400 million dollars (£255.7 million) to the DoJ and plead guilty to one charge of conspiring to make false statements to the US government.
The charge relates to its US regulatory filings in the Czech Republic and Hungary, and its conduct in the US over the mammoth £43 billion Al-Yamamah contract with Saudi Arabia.
BAE will also pay £30 million in the UK for failing to keep "reasonably accurate" accounting records over activities in Tanzania - the SFO's largest settlement with a UK company.
The British charge relates to a £25 million contract signed in 1999 to supply a radar system to Tanzania, and also to more than £7 million of payments to a former marketing adviser in the east African country.
BAE Systems chairman Dick Olver said the settlement would help the firm draw a "very heavy line" under the corruption claims but others said the company has been let off the hook.