Britain said Tuesday it had abandoned a bid to provide training in Saudi Arabia's penal system, as it raised concerns with Riyadh over a 74-year-old Briton facing a flogging.
"The government has decided that it won't be proceeding with the bid," a Downing Street spokeswoman told reporters.
The potential £5.9 million ($9 million/7.9 million euro) contract was to provide a "training needs analysis".
The Saudis have been informed, the spokeswoman said, adding: "We can still continue to engage with the Saudis on these issues."
Downing Street insisted that the decision was separate from the case of Karl Andree, 74, who has been told he could face 350 lashes in public after serving a year in jail having been caught with home-made wine.
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The spokeswoman said the withdrawal was to do with winding up Just Solutions International, a commercial offshoot of the Ministry of Justice.
The decision "reflects what is the best way to prioritise what we want to do at the Ministry of Justice, the domestic reforms we want to carry out", said the spokeswoman.
Newspapers reported Tuesday that British ministers had been at odds over the contract.
The Times said Justice Secretary Michael Gove wanted to pull out of the deal agreed by his predecessor, but Foreign Secretary Philip Hammond thought it would make Britain look untrustworthy to a key ally.
The spokeswoman said Andree's sentence was "extremely concerning" and Prime Minister David Cameron was "is writing today to the Saudis to further raise the case".
There has been a "gradual stepping up of government activity" on the issue, she said.