BAE Systems Plc , Europe's biggest defense contractor, will pay around $450 million in fines to end a long-running corruption investigation on both sides of the Atlantic.

Under a settlement with British and U.S. authorities announced on Friday, the company will plead guilty to one charge of conspiring to make false statements to the U.S. government in connection with regulatory filings and one charge of breach of duty in relation to accounting records of payments made in Tanzania.

The company very much regrets and accepts full responsibility for these past shortcomings. These settlements enable the company to deal finally with significant legacy issues, Chairman Dick Olver said in a statement.

BAE shares were up 2.2 percent at 1618 GMT, as the market welcomed news of the fine, which was not as high as some had feared.

While it's a substantial figure, it's less than the worse case scenario, said analyst Tina Cook at brokerage Charles Stanley, noting initial media reports had suggested a figure of up to 1 billion pounds ($1.6 billion) from Britain's Serious Fraud Office (SFO) along, later revised down to between 200 million and 300 million.

It also removes an overhang on the share price caused by uncertainty about the investigations.

In October, when the SFO said it was prepared to prosecute BAE for bribery but stopped short of formally requesting a criminal trial, legal experts said the company could face penalties of hundreds of millions of pounds if found guilty.

Some lawyers said the SFO would want to show it had teeth by following the lines of Germany and the United States in dealing with international corruption.

In late 2008 German industrial conglomerate Siemens agreed to pay just over $1.3 billion to settle corruption probes.

SFO director Richard Alderman said in a statement: I am very pleased with the global outcome achieved collaboratively with the DoJ (Department of Justice). This is a first and it brings a pragmatic end to a long-running and wide-ranging investigation.

A previous investigation by the SFO into reports BAE paid about 1 billion pounds over a decade to Prince Bandar bin Sultan in connection with the al-Yamamah arms deal was halted in December 2006 by former Prime Minister Tony Blair after the probe angered Saudi Arabia.

Authorities had cited the risks the inquiry posed to Britain's relationship with the oil kingdom, but the move attracted sharp criticism by anti-bribery campaigners and British media. (Reporting by Rosalba O'Brien, Paul Sandle and James Davey; Editing by David Holmes) ($1 = 0.6363 pound)

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