UPDATE 1-BAE has 6 days to settle UK bribery case - sources

(adds ex-US Justice Department fraud section chief comment)

LONDON/NEW YORK, Sept 24 - British prosecutors want BAE Systems <BAES.L> to plead guilty and agree to a substantial fine by Sept. 30 over allegations of bribery and corruption or face possible criminal prosecution, sources close to the case in Britain and the United States said on Thursday.

The Serious Fraud Office (SFO) in London is looking to wrap up a six-year investigation into BAE arms sales in the Czech Republic, Romania, South Africa and Tanzania.

Essentially, British authorities want a guilty plea from BAE and for the company to pay a sizable penalty to resolve the case, the sources close to the investigation said. Otherwise, prosecution would be considered, they said.

A spokesman for SFO declined to comment.

U.S. authorities also have investigated Farnborough, England-headquartered BAE, the Pentagon's No. 5 supplier by sales, for alleged corruption in a 1980s British arms deal with Saudi Arabia valued at up to $85 billion. U.S. Department of Justice officials declined to comment on the British case.

BAE spokesman John Neilson said the company "is providing access to people, information and premises whenever requested" by authorities.

"It wholeheartedly supports a rigorous approach, in the hope that it brings to a conclusion enquiries which, in the case of the SFO, are now in their sixth year," Nielson said in a statement.

SFO's case involves allegations of bribery and corruption in the two Eastern European countries and two African countries going back to the 1990s. In December 2006, the SFO dropped an investigation of allegations of bribery of Saudi Arabia officials in an arms deal.

Then-Prime Minister Tony Blair said the probe threatened national security, but the investigation continued into bribery allegations related to BAE sales to the other four countries.

If the SFO fails to reach a settlement with BAE and decides it wants to prosecute the company, it would send a recommendation to Attorney General Patricia Scotland, who would then decide whether or not the case was strong enough and whether it was in the public interest.

The U.S. Justice Department typically coordinates with foreign governments in cases involving allegations of wrongdoing by countries headquartered on their soil.

The Department of Justice "would love to see those foreign governments enforce existing laws against companies in their own countries," said Joshua Hochberg, a former head of the Justice Department's Fraud Section who supervised all Foreign Corrupt Practices Act investigations.

Hochberg, now in the Washington office of McKenna Long & Aldridge, said he had no information on the status of investigations involving BAE.