Europe suspends payments to Hamas

European aid to the Palestinian Authority was suspended yesterday, but Brussels remained in contact with the Hamas-led government as it sought other routes to channel humanitarian, health and education funding to the territories.

At a meeting in Luxembourg, EU foreign ministers agreed to a cessation of European Commission and bilateral payments to Hamas, because of its failure to renounce violence, acknowledge the right of Israel to exist or accept peace accords. But the ministers ruled that there should be contacts with officials in the authority, which opens the possibility of finding new ways to deliver cash.

The EU will continue to fund programmes through the World Bank and non-governmental organisations. But direct annual payments worth €120m (£85m) are being frozen.

Ursula Plassnik, the Foreign Minister of Austria, which holds the EU presidency, said there was "no serious move" by the Hamas-led government "towards the principles we have expressed" including the renunciation of violence. Jack Straw, the Foreign Secretary, said: "European taxpayers would find it intolerable if their money were to be used for terrorist activities."