No 10 denies move to block sale of Hawk jets to India

The Government was mired in confusion yesterday over whether it would halt arms sales to India and Pakistan to avoid deepening the crisis that has brought the two countries to the verge of war.

Downing Street dismissed suggestions by the Department of Trade and Industry (DTI) that export licences for arms would be blocked until the tension in the Indian sub-continent eased.

Tony Blair's official spokesman said: "There is no arms embargo, no suspension of arms, no contract to rule on."

Number 10 was irritated that the question of arms exports became public as Jack Straw, the Foreign Secretary, travelled to India and Pakistan for urgent talks on the crisis.

The Independent on Sunday disclosed that the DTI had ordered a pause on export licences, fuelling speculation that the £1bn purchase of 66 Hawk jets from BAE Systems might be jeopardised. The deal has been under discussion for 16 years and the Indian Government is due to give its decision soon.

The move by Patricia Hewitt, the Trade and Industry Secretary, to call for a pause means more careful scrutiny of proposed arms exports to India and Pakistan but stops short of a ban. The muddle provoked pressure from Labour MPs for the Government to announce a formal embargo.

Eric Illsley, a member of the Foreign Affairs Select Committee, said: "Obviously there is some confusion. A lot of people were under the impression that an embargo was in place, including me."

Martin O'Neill, chairman of the Trade and Industry Select Committee, said: "I think it [a ban] is the correct thing to do in the circumstances."

Mr Straw insisted: "There are no plans for an embargo. There is not any confusion. There are a set of national and EU criteria in arms sales to which we are signatories. They take account of a wide variety of possible circumstances, for example military build-up."

In a speech in Berlin, the Foreign Secretary warned: "The current tension, and the build-up of military forces in Kashmir, could all too easily spiral out of control into a conventional – and then nuclear – conflict of a kind we have simply never witnessed before."

He said the incalculable risks included "death, destruction, disease, economic collapse, affecting not just the immediate war theatre but many parts of the Indian subcontinent and lasting for years and years".

Mr Blair appealed for both countries to pull back from the brink during telephone calls with General Pervez Musharraf, the Pakistani President, and Atal Bihari Vajpayee, the Indian Prime Minister.