My wife is nearly three months pregnant so we are looking at various hospitals we did consider going back to London. We are also looking at various local hospitals, namely American and city hospital.

A british friend of mine said that under UK law if I have the child here then their children (ie my grandchild) wont automatically receive British citizenship... is this true??

Help appreciated

I think the business of grandchildren is true, but I think that it is something along the lines that if your child marries somebody in the same situation that their offspring won't have automatic British citizenship.
I know it's a daunting prospect, but it might be worth tormenting the gin-and tonic brigade (A.K.A British Embassy)

That rule would apply to any child of my daughter, who was born in KSA, but I though it was only because her mother was a non-UK citizen and only if the grandchild was also born overseas. It now seems that the nationality of her mother may not necessarily be as important as where the child was born.

Yes - I think that is right. The rules are complicated and this might help:-

http://www.ukba.homeoffice.gov.uk/br.../bornoverseas/

if a child is born here, his child must be born in the uk to get automatic citizenship etc, but of course if you are all british through and through you would be granted british citizenship unless he marries someone of different nationality it would just take longer with the paperwork etc.

I think I should check with the embassy to be safe, thanks though!!

The Embassy are unlikely to help you. Is there anything unclear about the Home Office website?

There is a difference between being British "by descent" and "otherwise than by descent". If you choose to have a child outside the United Kingdom and its territories, you need to understand this.

You've not even told us if you and/or your wife are British otherwise than by descent.

Both my wife's parents are English. My mother was English and my father is Cypriot. We may end back in the UK in a few years anyway l, if that's the case the. It doesn't matter

the issue is that if you do not have british parents, for eg, my youngest was born here in auh, his children to get automatic british citizenship would need to be born in the uk, but we are british, both sides,both sets of grandparents and all before were british, we are the first to live overseas, so for us, it would just be a lot more paperwork... the issue is if half of the parents are not british.....

Only 1/4 of the grandparents would not be British by birth. Anyway if my child (who will have a british passport) gives birth to his or her child in the UK then we are ok, no?

Not 100% sure, but as far as I recollect, Then your kid will be O.K.

It's us wandering expats who find it awkwards!

It all depends on the parents' citizenship status and domicile/residence. Get proper advice. Not something to mess about with. Do NOT rely on what you read in a Forum or hear in the saloon bar of the Saracen's Head !

Probably just easier to fly back to London.

So you are British all the way back to the dawn of time, yet not a native English speaker. That is quite impressive stuff.

you know what i mean, actually no take that back, there is scottish blood in me too....!!!!