A US subsidiary of BAE Systems has agreed to pay the US government $30m (£17.1m) to resolve claims that it knowingly sold defective body armour to federal agents and US state police that were not bullet-proof.

Armor Holdings, whose acquisition by BAE Systems for $4.1bn was approved by US authorities last year, faced claims by the Department of Justice that it knowingly manufactured and sold defective Zylon bullet-proof vests.