The Attorney-General is also expected to ask for outside legal advice before she decides whether the case is strong enough for BAE, which employs more than 100,000 staff, to wholesale pearl jewelry be charged. Legal sources said that she was unlikely to make a decision before December and it could even be delayed until the new year.

The SFO is investigating allegations of bribery and corruption in four deals that BAE did with South Africa, Tanzania, the Czech Republic and Romania.BAE has denied any wrongdoing and says that, if charges are brought, it will fight them in court, if necessary.

It appears, however, that BAE may escape questioning over the South Africa and Romania deals as the pearl necklace style SFO is understood to be preparing to jettison large parts of its investigation. It is likely that the SFO will focus on one or two incidents rather than try to bring a case so large that it could collapse under its own weight.

The SFO is continuing to hold out the prospect of an out-of-court settlement. The two sides had been negotiating but failed to agree terms by the SFO’s deadline of the end of freshwater pearl earrings last month. A settlement remains a possibility if BAE admits wrongdoing and pays a fine — possibly of £300 million. BAE is understood to have ruled out a settlement of more than £30million.