Britain withholds Malawi aid amid political impasse

Britain is withholding 20 million pounds in aid to Malawi until the southern African nation's parliament approves a government budget for 2007/2008, Britain said on Monday.

"If there is no budget, Britain will not be in a position to consider a poverty reduction support grant of 20 million pounds as a means of disbursing aid to Malawi," said Lewis Kulisewa, a spokesman for the British High Commission.

The British announcement came after Malawi's High Court issued an injunction allowing the opposition-controlled parliament to ignore President Bingu wa Mutharika's order that it reconvene to debate and pass his $1.2 billion budget bill.

The United Democratic Front and the Malawi Congress Party, the two main opposition parties, have refused to do so until a dispute over the poaching of their members by wa Mutharika's ruling Democratic Progressive Party (DPP) is resolved.

The debate, which should have been concluded by June 30, was suspended indefinitely last month, leaving the government to run on a monthly skeleton budget and threatening to cut off essential services to Malawi's 12 million people.

One of the poorest nations in the world, Malawi relies on aid from industrialised nations and international agencies. Former colonial ruler Britain is the largest bilateral donor, providing about 70 million pounds.

Kulisewa said the British government would continue to support essential programmes in Malawi while lawmakers tried to break the political impasse, which has been building since wa Mutharika bolted from the UDF after winning the 2004 election.

Diplomats in the capital Lilongwe said other donors could follow Britain's lead if the deadlock continued.

"This continued impasse may lead to loss of donor confidence that this administration has built in the last few years," a diplomat said, on condition of anonymity.