Madrid, Sep 13 (IANS): Spain's Socialist government on Thursday said it would go ahead with the sale of 400 laser-guided missiles to Saudi Arabia, backtracking on an earlier announcement that the deal could be nixed following the fatal bombing of a school bus in Yemen.

Foreign Minister Josep Borrell told Spanish radio the government saw no reason not to go ahead with the planned sale of the projectiles, Efe news reported.

The Spanish Ministry of Defence had announced on August 16 that it would review the arms sale to the Sunni kingdom after Saudi-led Arab forces struck a school bus in Yemen, killing 15 children.

It said it was prepared to refund the 9.2 million euros ($10.7 million) that Riyadh had already put towards the deal.

The decision alarmed Spanish arms manufacturer Navantia, which feared its contract to build five warships for Saudi Arabia would be cancelled as a retaliatory measure.

The Spanish government said the decision was never officially adopted.

Saudi Arabia and its military allies in the Gulf intervened in the Yemeni civil war against Houthi rebels in 2015.