It is pretty ludicrous to expect Tanzania to be spending �28m on a military air traffic control system it does not need

Tony Baldry Conservative MP

The British-made system has been at the centre of a bitter row over the government's commitment to tackling poverty in Africa.

Critics say Tanzania does not need such an expensive system and that the cash would be better spent on health and education.

But Prime Minister Tony Blair has reportedly given his blessing to the deal, which safeguards 250 BAE Systems jobs on the Isle of Wight.

International Development Secretary Clare Short, who is meant to have a veto on deals which endanger "sustainable" development, was fiercely opposed to it.

Stormy cabinet

Government sources described the Watchman radar system as "tried and tested" and said it was in use at 100 locations around the world.

Ms Short is reported to have been over-ruled on the decision by the Department of Trade and Industry, following a stormy cabinet committee meeting on Tuesday, chaired by Deputy Prime Minister John Prescott.

Short: thought to be against the deal

The Chancellor Gordon Brown, who has been instrumental in securing debt relief for Tanzania, is also said to have pushed hard for the deal to be cancelled.

The controversial sale is reportedly funded by a �40m loan from Barclays Bank, but the government is insisting this will not affect debt relief in Tanzania.

'Much-needed benefits'

Downing Street and the DTI both said it was not government policy to comment on individual licence applications.

Treasury spokesman Lord McIntosh of Haringey told the Lords "no official decision had been taken on the matter".

The more we learn about this deal the murkier and murkier it becomes

Oxfam

But government sources said a commercial contract between the UK and Tanzanian governments and BAE Systems had been entered into.

The system is understood to have already been built on the Isle of Wight.

A government source said: "The government of Tanzania believe the system will bring much needed benefits in terms of safety, security and tourism."

'Fiasco'

Oxfam has said the cost of the system could pay for 3.5 million children in Tanzania to go to school, or provide health care for two million Tanzanians.

A spokesman said it was "deeply disappointing" that the export licence had been granted.

"The more we learn about this deal the murkier and murkier it becomes."

It called on the government to include rules on sustainable development in the forthcoming Arms Export Control Bill.

Isle of Wight MP Andrew Turner told BBC Radio 4's World At One programme the system would "help stop smuggling and ivory poaching".

Obsolete technology

Tory MP Tony Baldry, chairman of the International Development Committee, said: "It is pretty ludicrous to expect Tanzania to be spending �28m on a military air traffic control system it does not need."

He added the select committee tried to "unravel" how the decision came to be made, but was blocked by Trade Secretary Patricia Hewitt who refused to allow her officials to co-operate.

The UK Government has written off �100m of Tanzania's debts so far.

Tanzania's President Benjamin Mkapa says the east African country needs the new radar system to replace obsolete technology.