Whitehall has apparently been financially traumatized by it's involvement in the UN operation in Sierra Leone, which costs about $600m (425m) a year. Foreign secretary Jack Straw and minister for Europe Peter Hain favored licensing or regulating rather than banning such companies.
The British government and Foreign Secretary (at the time) Robin Cook were embarrassed by mercenary activities most recently during the 1998 arms-to-Africa affair, by disclosures that diplomats from the Foreign Office were involved with the UK private military company "Sandline" in Sierra Leone.
Straw pontificated that "today's world is a far cry from the 1960s when private military activity usually meant mercenaries of the rather unsavory kind involved in post-colonial or neo-colonial conflicts". Apparently, the Foreign secretary thinks that properly regulated private military activity will make for tidier battlefields.
Half a world away, the South African government was investigating the alleged mercenary activities of former "Executive Outcomes" mercenaries were now operating as "NFD" in the Sudan. The National Conventional Arms Controlling Committee (NCACC), chaired by South African Minister of Education Kader Asmal, launched a formal investigation on the 12th.
"Executive Outcomes" was a South-African based private military company that operated in Sierra Leone and Angola, but formally closed it's doors in December 1998. The Pretoria government suspects that NFD may be violating the South African "Foreign Military Assistance Act of 1998".
In 2001, it was reported that based on Libya's recommendations, "NFD" had been contracted by Khartoumto help protect oil fields in the south and train special forces officers in counter-insurgency operations. The Sudan has been hip-deep in a bloody Civil War for the last 19 years, but Khartoum has attracted investment interest ever since the oil companies smelled potentially huge profits in a spate of drilling and exploration in 1999. - Adam Geibel
"Cry Havoc, And Let Slip The Dogs Of War" - but only if they're properly licensed. The British Foreign Office has concluded in Green Paper published on 12 February 2002 that some United Nations' peacekeeping operations could be contracted out to private military companies (read "mercenaries").