The Independent reported last week that Lord Erskine of Rerrick, who lives in northern Cyprus, said he was a consultant to those negotiating the deal and claimed to have told the Foreign Office of its existence.
Sources in the arms trade and Turkey disclose that the negotiations, which may be worth pounds 150m, are for the provision of British trainers and, later, of a large number of mercenaries.
A British businessman believed to be taking the lead in the discussions has visited Azerbaijan three times in recent months.
Douglas Hogg, the Foreign Office minister, confirmed late last week that an investigation was underway. 'We have as yet no evidence to support these allegations, but my officials are looking into them.'
The reply followed a question from Chris Mullin, Labour MP for Sunderland South, asking the extent of government knowledge.Reuse content