An investigation by the Independent and the Independent on Sunday has revealed that senior Ministry of Defence officials were aware that a British company, Allivane, was involved with an international network of companies supplying Iran during the first Gulf War. The MoD also intervened in the running of the one of the company's contracts in 1988.
This was a legal contract with Saudi Arabia, but officials knew of a plan to use it to disguise an illegal shipment of ammunition. DTI officials, it was revealed, were issuing export licences in the name of a company which did not exist, for products not made in the UK at the time, and for countries which could have no reasonable requirement for the arms.
It has also emerged that the company was involved in contracts for the supply of ammunition components to Iraq. Allivane was involved with the Space Research Corporation, the company run by Gerald Bull, who designed the supergun, in the manufacture of assembly lines components for the production of artillery fuses for Saddam Hussein.
Labour's defence spokesman, Dr David Clark, said: 'I was disturbed to learn about this and it shows how hypocritical the British government has been. Some of these weapons could have been used against Allied forces two years ago.'
Mr Needham requested to see the Independent's evidence as the DTI confirmed that it had started to examine the disclosures. The MoD, which supplied Allivane with spares, is also investigating.
A DTI spokeswoman said that procedures for the issue of export licences had been revised since the supergun affair in 1988.
But this assurance has not satisfed Richard Caborn, Labour MP for Sheffield Central, chairman of the Commons' trade and industry select committee. He said he was concerned that Michael Heseltine, President of the Board of Trade, had not resolved all the concerns raised by the supergun inquiry which concluded earlier this year. He said the involvement of the MoD with Allivane would be raised with his committee at the end of the summer recess.