|Almost as surprising, though, as the decision itself has been the muted reaction. Business and trade unions have united in backing Lord Goldsmith's decision to drop the Serious Fraud Office's two-year investigation into allegations against BAE Systems, Britain's foremost defence company. The opposition Conservative party has been largely silent. Only the Liberal Democrats have protested at the subordination of the rule of law to Britain's relationship with the Saudi sheikhs.
The establishment consensus has been that the Saudi authorities would have scrapped a multi-billion pound contract to buy Typhoon fighter planes from BAE. Thousands, perhaps tens of thousands, of jobs would have been been at risk.
In Whitehall's corridors of power and in company boardrooms alike, suggestions that Lord Goldsmith should have let the law take its course are met with world-weary groans that arms deals in that part of the world are always dodgy: "It's the way of the world, old chap." If British companies had not paid "commissions" to Saudi princes, the business would have gone to the Americans or, worse, the French.
It should be stressed that BAE Systems has denied the allegation that it operated a Pounds 60m slush fund in association with the 20-year-old
Al Yamamah arms contract. Lord Goldsmith has voiced doubts as to whether the investigations would have led to successful prosecutions. Yet surely it was more than a coincidence that the attorney-general halted them soon after the SFO had gained access to a number of Saudi bank accounts in Switzerland.
Lord Goldsmith said that commercial considerations had not played any part in his decision. To have done otherwise would have been to admit a breach of the Organisation for Economic Co-operation and Development's anti-corruption code. Instead, Lord Goldsmith invoked the broader national interest. He had taken advice from the prime minister, the foreign and defence secretaries and the intelligence services and concluded that the investigation jeopardised Britain's national security.
Tony Blair, prime minister, offered elucidation. Britain's relationship with Saudi Arabia was "vitally important for our country in terms of counter terrorism, in terms of the broader Middle East, in terms of helping in respect of Israel/Palestine". Whitehall officials translate this as follows: such was the fury of the Saudi princes at the possibility of their bank accounts being investigated that their threats went well beyond the commercial.
As the Financial Times has reported, the Riyadh government said it would withdraw all co-operation on security, including intelligence-sharing on al-Qaeda, and would downgrade its embassy in London unless Mr Blair scrapped the inquiry. Since Saudi Arabia was the main source of finance and Islamist ideology for al-Qaeda, this was a threat taken seriously.
Yet subverting the rule of law was not the answer. Though this government often seems to think otherwise, the rule of law stands above any and all individual statutes as the foundation for freedom and democracy. It gives citizens a vital guarantee of equality before the law and serves as the bulwark against arbitrary power. It demands the rigorous separation of executive and judicial decision-making.
All this should be familiar to
Mr Blair and Lord Goldsmith. Both, after all, are lawyers. A recent constitutional reform act sets out explicitly the government's duty to uphold the rule of law. Yet all it takes apparently is a threatening missive from Riyadh and such principles are cast aside.
Those impatient of principles should reflect on the supposed realpolitik of Lord Goldsmith's decision. Britain, it says, is now content to be reliant on a regime so determined to be spared any embarrassment that it would even withhold information on al-Qaeda terrorists. How comfortable can any state or government feel in such a relationship? Not at all.
Perhaps the Saudis were bluffing. Either way, this affair has opened eyes to the nature of the Riyadh regime.
For Britain, it is a grave strategic error, as well as a shameful retreat from the rule of law, to buckle before such threats. Mr Blair often says that principle and realism in foreign policy are two sides of the same coin. He is right. A pity then that he decided otherwise in this case.