Christian aid agencies have expressed concern at the news that Britain's overseas aid programmes in many Latin American, East European and central Asian countries are likely to be slashed back to pay for the reconstruction of Iraq.
The need to find £267m over the next two years from within the budget of the Department for International Development (DfID) will lead to the axing of numerous anti-poverty projects in "middle-income" countries, according to documents seen by the Guardian.
"These decisions are very tough ones," one memorandum admits.
Among DfID-funded projects that could be cut are programmes providing drinking water in Guyana, health advice in Brazil and support for indigenous Indians in Bolivia.
Downing Street and the Treasury are understood to have turned down requests for extra funding to make up the shortfall.
Though not the most deprived, "middle-income" countries are still home to at least 140 million people living in poverty. They include swaths of Latin America, North Africa, the Caribbean and Eastern Europe.
In a letter sent to the prime minister yesterday, Christian Aid, catholic agency Cafod, Oxfam, Save the Children, Care International and Action Aid claimed the policy breaches undertakings given by Tony Blair that money would not be redirected away from other programmes to pay for Iraq.
"We are very concerned... about the prospect of significantly reducing, and even shutting down, a number of programmes in middle-income countries in order to find these funds," the letter says.
Many millions of poor people will suffer, it adds.
"These programmes have been developed precisely because they support poor and marginalised groups who live in countries with high inequality or significant levels of poverty."
The charities, all members of the British Overseas Aid Group, asked for an assurance that "funds for the reconstruction of Iraq will be truly additional and not simply diverted from existing British commitments to poor people in other parts of the world".
Hilary Benn, the new international development secretary who flies out to the Donors Conference on Iraq this week, yesterday conceded that "the money will involve re-prioritisation of middle-income programmes and some will come from the department's contingency reserves".
In his statement to the Commons last week on DfID's total £544m commitment to Iraq over three years, Mr Benn did not mention any cutbacks.
He reassured MPs that it would not "involve any reduction in DfID's planned development expenditure for low-income countries".
A DfID review is to be held next Thursday at which the cutbacks will be discussed.
Of the £267m required over the next two years, around £100m is likely to be "reallocated" from existing programmes, and the rest will come out of reserves and small amounts extracted from other departments.
Latin America will be one of the hardest hit regions, with drastic cuts to poverty-reduction programmes. The proposals, which are being discussed in Whitehall, have caused "great concern" among DfID staff in the Americas and have reportedly led to "struggles" within the department.
Some officials within DfID, it is understood, are arguing that DFID should pull out of South America altogether.
An internal DfID message, entitled "Resource Reallocation", warns staff: "The burden of financing Iraq will have to be borne by the contingency reserve and reductions in middle-income country budgets.
"These plans will mean that a number of our current programmes in middle-income countries will close... We intend to continue working with middle-income countries but we shall have to leave some of this work to other development partners. These decisions are very tough ones."
British charities are alarmed. "This is a real scandal," said Oxfam spokesman Constantino Casasbuenas. "It would affect very poor countries like Bolivia, where most of the population live in poverty without access to public services or education."
Other countries which may be affected include Peru, Bolivia, Brazil, Ukraine, Jamaica, Guyana, Bosnia, Russia and the Palestinian authorities. It is not clear whether countries in Africa, which has been a priority for DfID, will be excluded from the review. Funds to aid projects in South Africa could be cut.
Aid to middle-income countries was due to be reduced so that 90% of aid was channelled to low-income countries by 2005/6.