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Britain dragged into coup plot as rumours swirl over London meeting

Thatcher's business partner turns state witness as diplomatic row builds over alleged west African putsch

One of Sir Mark Thatcher's key business partners has turned 'state witness' and is alleged to have given dramatic new evidence to South African police investigating Thatcher's role in the alleged coup to overthrow the President of Equatorial Guinea.

The revelation comes as speculation mounts over what British and US officials knew about the alleged plot and when. Insiders claim that officials in both countries were aware of a planned attempt to topple the leader of the oil-rich west African state, although both governments have denied this claim.

Thatcher's business partner, former crack mercenary pilot Crause Steyl, is believed to have handed over details of Thatcher's investment in an aviation firm that had contracts with Simon Mann, the old Etonian and former SAS officer in jail in Zimbabwe.

The former Prime Minister's son was arrested in Cape Town last week over accusations that he helped finance the alleged coup that aimed to overthrow President Obiang and replace him with the exiled Opposition leader Severo Moto.

The Observer, which first revealed details of Thatcher's alleged involvement in the coup last month, has been told by South African sources that Steyl accompanied Moto to the Canary Islands on the eve of the day the alleged putsch was to happen.

They were flown from Madrid to the islands in a South African-registered King Air 200 by a stunt pilot and landed in the morning of 7 March. The plane is then reported to have flown on to the Malian capital of Bamako where Moto awaited news from the mercenary leaders. The next day, the Boeing 727 carrying Mann and his crew of more than 60 mercenaries was impounded in Harare and those on board arrested.

Steyl's evidence could be highly damaging to Thatcher, who faces 15 years in jail after being charged last week with helping to finance the mercenary plot to topple the President. The government of Equatorial Guinea is requesting an interview with Thatcher in South Africa and is hoping to having him extradited to face trial there.

Thatcher's defence team in Cape Town - which insists he is innocent of all charges - believes Steyl is emerging as central to the prosecution and say they have been told to stay away from him. The lawyers suspect that Steyl has given the South African police a detailed affidavit containing several statements. Steyl was unavailable for comment.

The Observer has obtained details of the contract signed by Steyl and Mann on 16 January to provide aircraft and aviation services. Steyl is alleged to have persuaded Thatcher to invest $250,000 (£139, 586) in a joint venture between a company called Triple A and Mann's Guernsey firm Logo Ltd to provide aircraft and aviation services.

Thatcher's friends insist the investment was a 'peripheral one' in a flying doctor service and that the initials Triple A stand for Air Ambulance Africa. Similar cover stories have been used in mercenary operations, South African intelligence sources say, but Thatcher's friends say that his relationship with Steyl may be 'exaggerated and misinterpreted'.

Mann's associates say he relied increasingly on Steyl's experience in running air operations as plans for the coup plot played out this year. The two first met when Mann established Executive Outcomes in South Africa in the early Nineties and won a contract to run military operations in support of the Angolan government's operations against Unita rebels.

Steyl worked on several other private military operations such as the Executive Outcomes contract in Sierra Leone. It was Steyl and another former mercenary who arranged the leasing from US Dodson Aviation of the Boeing 727-100 which was seized in Zimbabwe with 70 former South African soldiers on board last 7 March. Steyl's brother Neil was piloting it, and has been held in Harare since March.

One of Steyl's associates suggested that it was concern for his brother's fate that prompted Crause Steyl to start co-operating with the Zimbabwean and South African investigations.

As further details emerge of the extraordinary coup plot, speculation is mounting over the role played by western intelligence agencies in the alleged plot to oust Obiang. An individual intimately involved in the alleged coup has claimed that British officials were aware of the plot to replace Obiang with Moto.

South African sources claim the rumours of the coup were circulating among diplomatic circles in Pretoria ear lier this year - although the Foreign Office denies any 'prior knowledge'.

The allegation that British officials knew about the potential illegal coup comes amid claims from British and Spanish intelligence agencies that French spies helped to scupper the plot.

It is also claimed that the US and Spanish security services were involved in the plot to replace the dictator of the tiny West African state, which has vast oil reserves.

Although it is not suggested that British intelligence was complicit in any coup plot, the claim that some officials might have had advance knowledge of the attempted putsch has prompted opposition politicians to demand a statement from the Foreign Secretary, Jack Straw. Menzies Campbell, the Liberal Democrat foreign affairs spokesman, last night called on the government to come clean about its knowledge of the operations.

Last night the Foreign Office categorically denied that it had any 'prior knowledge of the alleged plot'.

The Observer has learnt that in February this year there was a meeting at the London headquarters of the Royal Institute of International Affairs on the future of Equatorial Guinea. It is known that there was at least one government official present as well as representatives of the oil industry. According to sources present, there were active discussions about rumours of coup plots there.

Mann is accused of being the mercenary leader hired by mysterious business and political figures involved in an old-fashioned battle to control the oil reserves. Up for grabs was a huge multi-million pound bounty of cash plus a share of lucrative oil concessions.

Many in the intelligence community are asking whether a hidden hand was played by Western powers. Some suggest American, Spanish and British interests offered their backing to exiled Moto. On the other side were the French, who believed a successful coup would have cemented US domination in the country, where US oil giant Exxon Mobil already enjoys the most important drilling concessions. British intelligence sources have suggested that the French learned of the plot and helped to sabotage it.

Spanish intelligence sources have made similar claims. Former Spanish Prime Minister José María Aznar was a close ally of the exiled Moto, who lived in Madrid.

Mann, who was found guilty on Friday in a Zimbabwean court of attempting to buy arms for the botched coup, confessed to Spanish involvement in plot.

The Spanish government has denied this claim. But it has emerged that earlier this year two Spanish warships left the Nato naval base based near Cádiz. One of the frigates had on board 500 elite troops and the soldiers are reported to have been told they were heading for Equatorial Guinea.

Nick du Toit, one of Mann's alleged accomplices arrested in Equatorial Guinea, told the country's court last week: 'The Spanish government would recognise the Moto government and it had the blessing of some American higher-up politicians.' Moto has dismissed the coup plot as 'complete fiction'.

It was Du Toit who named Thatcher in a statement last week that led to his arrest. Thatcher's alleged involvement first emerged when The Observer obtained details of two letters written by Mann from prison referring to the former Prime Minister's son as 'Scratcher'.

Editorial Notes: Mike Ruppert writes: This is extremely significant. Someone's attacking the Neocons on another flank. Awesome. And remember, South Africa is a huge trading partner with Israel. If they kick British mercs out, they're going to have to kick CIA mercs out as well. South Africa is standing up to Uncle Sam.

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