Rob Evans, David Leigh, David Pallister and John Aglionby in Jakarta – Britain's controversial sale of tanks to Indonesia was a thoroughly corrupt transaction, according to the Alvis documents released yesterday to the Guardian.

If the deal were to take place today, it would be a criminal offence under recent legislation. Witness statements by Alvis executives describe in rare detail the way in which generals and members of ex-president Suharto's family were paid off.

The local agents were required to be Indonesian army family members. The proceeds had to be split with a company currently owned by the Indonesian military. And finally, to get the 160 million Pounds required released from the impoverished country's budget, Suharto's daughter herself had to be recruited and rewarded.

The high court heard that 16.5 million Pounds was paid into offshore accounts – a rake-off of around 10% of the deal's value.

"Madam Tutut", as Alvis's chief executive, Nick Prest, termed her, first appeared in London in February 1994, Alvis says. Mr Prest recorded that she met him and two other Alvis executives, Trevor Harrison and Lionel Steele.

"Her real name was Mrs Siti Rakhmana ... the eldest daughter of the then president Suharto ... She encouraged us to make arrangements with her associates to put a consultancy agreement in place. She provided her services through a company called Global Select."

Alvis plc signed the deal with her on May 4 1994, promising her money "to assist with sales of the Scorpion [tank]". She turned up in England again two months later to visit the Alvis plant in Coventry with two army generals in tow, Lt Gen Hartoho and Lt Gen Mantiri.

"The purpose of this visit was to provide the armed forces with final reassurance concerning their commitment to Alvis before pressing the button," Mr Prest says.

Another Alvis executive, Lionel Steele, recorded that if the attention of the president's family was attracted to a deal, they "would automatically want to be involved in any large contract".

Alvis's local agent, Rini Soewondho, testified: "Arrangements for the presidential budget could only be made if they were supported by President Suharto. This usually meant seeking support from a member of his 'inner circle'."

Thanks to Tutut, the money came through to buy 50 brand-new light tanks, costing 1.6 million Pounds each. Ironically, in view of the furore at the time in Britain about the use of the tanks to suppress rebels, there appears to have been no real military demand for such extravagant weapons. Suharto, the documents reveal, was interested in the idea merely because he thought the army's existing armoured cars looked unimpressive.

The first sale was authorised by the Major government in Britain, after what Alvis's chief executive called "a lot of work ... in the light of the political antipathy". The export licence came through in March 1995.

Alvis then sought to exploit its Tutut channel to get a repeat big sale of Scorpions. A payment deal was signed through a fresh Tutut offshore vehicle, called Basque.

But this time there was a problem. "The Koreans ... were offering a competitive vehicle on generous credit terms. We were able to see off this competition ... Madam Tutut was instrumental in achieving this."

Despite the fact that the first Alvis shipment had been in such a rush that the tanks did not work properly, another 80 million Pounds was found from the Indonesian treasury to buy 50 more of them.

Mr Steele records: "They had intended to purchase three battalions but at that point the Asian economic crisis took place, the Indonesian rupiah was devalued from 2,300 to 13,000 to the dollar and President Suharto was ousted. "The new government had more urgent priorities than buying our vehicles".

The documents show that payment was made by Alvis at every level to make arms sales. Their agents, Rini and her brother Didie, were children of a former top Indonesian army officer. "The minister of defence issued a directive," Rini records, "that the purchase of all defence equipment from foreign companies must be made through agencies ... owned by retired Indonesian military personnel [or a member of his family]".

Alvis duly signed up with their company PT Surya Kepanjen. Rini and Didie in turn put Alvis in touch with the deputy chief of staff of the army, Gen Sahallah.

According to Rini, the generals wanted their cut. "[Gen Sahallah] said a company named PT Truba would also have to be appointed." That company, Alvis's chief executive testified, "was owned by the Indonesia army".