British firms lose contracts in backlash over Pinochet

AS THE Chilean Foreign Minister held crisis talks with Robin Cook yesterday, evidence was mounting that British businesses are losing lucrative contracts in a backlash over the Pinochet affair.

On the day that the former dictator was ordered by magistrates to appear in court on 11 December for an extradition hearing, a Hertford-based firm revealed to The Independent that it had lost a multi-million pound order as a result of the general's arrest.

Lockheed Martin Solartron - a subsidiary of the US aviation giant - was poised to provide flight simulator equipment to the Chilean Army. "We were on the edge of securing the deal which would have been very important to a small company like us," said a senior company source yesterday.

"Then the day after Pinochet was arrested we received a fax from the army saying all deals with British companies were on hold until the matter had been resolved. In reality I think it will be very hard to win that deal now. It could have an effect on jobs - a handful of jobs could be dependent on this."

The company is likely to be the first of several trade victims, particularly within the defence industry. The Ministry of Defence's Defence Export Services Organisation said there had been other problems. A spokesman said: "Some companies have reported difficulties since this affair started."

A sales manager with another company in the defence industry said: "A lot of businesses are obviously very worried. People say this is a political thing, but it is having commercial effects."

The Chilean Foreign Minister Jose Miguel Insulza, a socialist who went into exile after General Pinochet overthrew the democratically elected government of Salvador Allende, arrived in London yesterday and is believed to have told Mr Cook, the Foreign Secretary, that the detention was putting enormous strains on Chile's fledgling democracy.

According to Chilean sources, Mr Insulza also stressed during the one- hour meeting that the coalition government of Eduardo Frei has not neglected the issue of human rights abuse under the Pinochet regime and steps were being taken to pursue those responsible.

Mr Cook is said to have assured Mr Insulza that the Government's actions were not "politically motivated".

Downing Street said yesterday Jack Straw would make his decision on the extradition proceedings alone. Magistrates yesterday agreed to his request to postpone next week's extradition hearing.