A high-stakes court battle between BAE Systems and the Serious Fraud Office loomed late on Thursday after corruption investigators decided to press for criminal charges against the arms manufacturer over its dealings in eastern Europe, South Africa and Tanzania.

Thursday’s announcement by the SFO that it had decided to seek the consent of Baroness Scotland, the attorney-general, to prosecute the company over alleged backhand payments to middlemen sent shares in BAE lower. They closed down more than 4 per cent.