One quarter of British government overseas direct aid to 'middle-income countries' will be diverted to help the reconstruction of Iraq, it emerged last week.
Regions such as Latin America and South Africa could bear the brunt of funding cuts that will see £100m redirected to Iraq between 2004 and 2006.
The total direct aid budget for middle-income countries is £200m per year.
The Department for International Development said most of the reallocation will take place in 2005-6.
UK aid agencies fear that many of their DFID-funded projects could be under threat. A joint letter from five major charities called on the Prime Minister to honour a commitment not to fund Iraqi reconstruction from programmes supporting poor people elsewhere.
Care International's head of policy Jay Goulden said: "Despite repeated assurances from the Government, significant cuts to overseas programmes are currently being debated within DFID."
