The US Department of Justice (DoJ) has issued the Government with a formal request for assistance in their probe into the UK's largest arms manufacturer.
The DoJ is investigating BAE Systems' business dealings - including allegations of corruption over a controversial contract with Saudi Arabia.
The Serious Fraud Office (SFO) abandoned its own investigation of the massive Al Yamamah deal amid concerns the Saudi authorities would withdraw co-operation on counter-terrorism matters.
Former Prime Minister Tony Blair and his Attorney General Lord Goldsmith were heavily criticised over the decision to halt the inquiry into the £40 billion contract.
BAE Systems has been accused of paying bribes of £1 billion to Prince Bandar bin Sultan in return for setting up the arms deal.
The Prince has denied receiving any improper payments while BAE has said that all payments it made under the terms of the deal were made with the express approval of both the British and the Saudi governments.
The Sunday Telegraph reported that the DoJ had written to the Home Office earlier this month asking for mutual legal assistance and the request is being considered by officials.
Robert Wardle, the SFO's director, said national security may be an issue in deciding whether to assist the US authorities.
He told the Sunday Telegraph: "We will do what is appropriate to comply with our obligations to help other jurisdictions, but obviously we will take into account the same considerations of national security if they arise."
