Liam Fox challenges David Cameron foreign aid policy

Defence Secretary Liam Fox has challenged David Cameron's plan to enshrine the Government's overseas aid spending targets in law, it was revealed today.

In a letter to the Prime Minister, Dr Fox argued that creating a statutory requirement to spend 0.7 per cent of national income on official development assistance (ODA) from 2013 will open the Government up to future legal challenges.

Instead, he said that the target should be recognised in legislation, along with a commitment to produce an annual report on whether it was being met.

Ironically, this was the same approach initially favoured in the case of the military covenant, which Dr Fox was forced to ditch after pressure from armed forces charities.

A source close to Dr Fox insisted that he was not opposed to the Government's plan to increase spending on aid, saying: "The Defence Secretary fully supports the principle of a 0.7 per cent target on international aid.

"The issue is simply how best to reflect this in law."

Some Conservative MPs have voiced anger at the decision to increase international aid budgets over the coming four years, at a time when spending on domestic priorities - including defence - is being cut back.

Dr Fox's letter, obtained by The Times, makes clear that he raised his concerns with International Development Secretary Andrew Mitchell and Foreign Secretary William Hague before writing to the PM.

"I have considered the issue carefully, and discussed it with Andrew and William Hague, but I cannot support the proposal in its current form," wrote Dr Fox.

"In 2009 the proportion of national income spent on ODA was only 0.52 per cent."

Putting the commitment no the statute books "could limit HMG(overnment)'s ability to change its mind about the pace at which it reaches the target in order to direct more resources toward other activities or programmes rather than aid", warned the Defence Secretary.

More stringent monitoring requirements may threaten the Ministry of Defence's ability to report and fund some of its own activities as ODA, he said.

And he warned: "I believe that creating a statutory requirement to spend 0.7 per cent ODA carries more risk in terms of potential future legal challenges than, as we have for the covenant, putting into statute recognition of the target and a commitment to an annual report against it.

"The latter would be my preferred way to proceed."

Downing Street declined to comment on a leaked letter.

But a spokesman said: "The aid allocation in the spending review shows our commitment to implementing our pledge to spend 0.7% of GNI (gross national income) on official development assistance from 2013.

"We are fully committed to enacting the 0.7 per cent commitment into law, in line with the Coalition agreement."