The official policy flies in the face of a declaration adopted by European Union heads of state at Cardiff last June, when, under Tony Blair's chairmanship, they agreed to punish the Serbs for their gross violations of human rights.
The latest Foreign Office memorandum, sent on 7 September to EU capitals, caused outrage among partner countries and Commission officials who had already agreed to harden sanctions on Serbia for its use of indiscriminate military force against defenceless Albanian civilians in Kosovo. The Commission is also on the point of taking Britain to court for failing to implement a flights ban on Belgrade that was agreed by foreign ministers last week.
Following a week of condemnations of Britain's policy by EU partners, behind the scenes, and mounting public outrage, the Foreign Secretary, Robin Cook, ordered a review of the controversial policy last night, senior diplomatic sources said. It remained unclear, however, whether Britain was prepared to agree to the reprisals against the Serbs.
In its attempt to justify Britain's opposition to sanctions, the Foreign Office has further exposed the shaky foundations of Mr Cook's "ethical foreign policy", according to diplomats and human rights campaigners.
Holly Cartner, of the New York-based Human Rights Watch, said: "This is very damaging. The notion of human rights violations as the basis for international sanctions is very well established. It is really distressing that the UK is putting forward these arguments on such a symbolic reprisal and does not bode well for other measures."
Britain contends that because the slaughter of civilians and the burning of ethnic Albanian villages in the Serb province does not affect EU member states directly, the reprisals are not justified under international law. "The present case [Serbia's massive military attacks on Kosovo civilians] concerns violations of human rights ... against local nationals. Though of considerable concern to EU member states, such actions do not ... justify taking reprisals," the position paper states.
The attempt to wriggle out of agreed, and already weak EU sanctions, caused immediate outrage among senior Commission officials dealing with Kosovo: "This is really baffling from a government which claims it has an ethical foreign policy. We have not heard this line of argument from anyone else," one official said.
Charles Radcliffe, director at the International Crisis Group in Brussels, said: "I don't know how these people can look at themselves in the mirror, they are hiding behind legal fictions to protect British industries."
The memo, circulated through the EU's secretive foreign policy communications network, casts doubt over the legal and political validity of any sanctions against Serbia over Kosovo. The right to take reprisals is available only to "an injured state" it says. In this case because the EU member states are not affected by the human rights violations, it has no right to take reprisals.
There is already intense international criticism of Europe's failure to help the 200,000 Kosovo refugees who are without food or shelter, with winter fast approaching.
Britain's refusal to sign up to the flight ban, will send a signal to Slobodan Milosovic, the President of Serbia, that it can act with impunity against the rebels and their civilian supporters in Kosovo.
The sanctions were agreed unanimously by a meeting of EU foreign ministers in Salzburg 10 days ago - which Mr Cook, who was on holiday, did not attend. Britain says it cannot implement the sanctions until September 1999 at the earliest.
The row over sanctions has also underscored the position of Christopher Hill, a US envoy, who has warned that Europe is "fiddling while Kosovo burns".
Britain's technical defence of its decision to continue allowing the Serbian airline JAT to fly in to the country seven times a week is that Britain is impeded legally by a 1959 air services agreement with Yugoslavia predating Britain's accession to the European Union. This requires both parties to serve 12 months notice before suspending landing rights and this has now been done.
The argument has been greeted with scepticism in the rest of the EU. Most member states, for example Germany, also have longstanding bilateral air agreements with Serbia but tore them up last week on the basis that their commitments under EU law and the political signal sanctions would send to Mr Milosevic are more compelling.
Jacques Santer, president of the European Commission, rounded on the British government last week for its failure to play by the rules. Decisions taken by the 15 [member states] applied to the 15, he said. "If one or more member states refuse to play the game it makes any effort to impose sanctions meaningless."Reuse content