The report - Forever in your debt? - accuses the G8, which comprises Britain, the United States, Canada, France, Germany, Japan, Italy and Russia, of double standards. It claims they have helped each other out in the past and are bailing out crisis-hit countries in Asia today, while dragging their feet for those most in need.
Christian Aid studied eight countries (named the P8) - Jamaica, Malawi, Bolivia, Tanzania, Bangladesh, Mozambique, Nicaragua and Ethiopia and found all were spending more servicing their foreign debts than on health.
In every country except Ethiopia the debts were more than the health and education budgets combined. The report claims almost pounds 1.8bn every year leave its poorest eight countries to repay debts while the G8 receive more than $30bn from developing countries.
The kind of problems faced by debt-hit countries include tackling Aids in countries like Tanzania where more than two million people are expected to be HIV-positive by 2000. In Mozambique, one of the world's most aid- dependent countries, less than 40 per cent have access to health services.
In Bolivia, one million children get no education at all while servicing debt takes nearly one-third of the country's income. In Jamaica, which is considered too rich to qualify for debt relief, one third of the population lives in what Unicef described as "absolute poverty".
Christian Aid argues Britain could take a lead by cancelling debts owed to it by the most heavily indebted countries. The amount would be less than a quarter of the amount spent on cigarettes each year.