Western donors have agreed a plan to channel more than £200m to Ethiopia's poorest people to compensate for a cut in aid to the central government which has been punished for a post-election crackdown.
The International Development Secretary, Hilary Benn, announced yesterday Britain would provide a £94m grant over two years to Ethiopian districts and civil society groups for basic services, including education, water provision and healthcare at a local level.
The funds are in addition to £120m announced by the World Bank yesterday. Other donors which ended direct budget support in January to the government of the Prime Minister Meles Zenawi - who was once hailed a model democratic leader and was a member of Tony Blair's Africa Commission - are also considering contributions through the World Bank.
Britain stopped a £50m grant to the government after 129 people were charged with treason in the turbulent aftermath of the elections last May. The opposition accused the government of robbing it of a parliamentary majority through fraud, while the government accused the opposition of attempting to overthrow it by force.
Mr Benn said: "Because of our concerns over governance, human rights and the ongoing detention of opposition, media and members of civil society, I announced in January that the UK could no longer provide direct budget support to Ethiopia.
"But as I said at the time, I do not believe that the poor people of Ethiopia should be made to suffer because of these political problems."
The British funding will be used to help get an extra 3.7 million children into primary school over the next two years, bringing the total in school to more than 15 million, to provide teacher training, and to pay for the salaries for an extra 160,000 primary school teachers.
It will also help pay the salaries of more than 16,000 doctors and nurses, provide vaccines and medicines and give more than 20 million people access to clean water.