British overseas aid is to rise by its biggest amount in history, according to a pledge in Chancellor Gordon Brown's Spending Review.

Fulfilling a promise made in last November's pre-Budget report, Mr Brown said the aid budget would increase by �1.5bn to reach almost �4.6bn in 2005/06.

That equates to 0.4% of national income, and the Treasury calculates it as a 93% real-terms increase since Labour came to power in 1997.

But it still falls short of the United Nations target of 0.7% of national wealth, a figure the government is pledged eventually to achieve.

Aid lead

The promise does, however, set Britain somewhat ahead of its neighbours.

The average rate of overseas aid budgets in the Group of Seven industrialised nations is less than 0.2% of national income.

The government also pledged to make grants more effectively targeted - a key complaint of charities and aid agencies.

Mr Brown claimed that 100% of British aid had now been untied, which means that aid will not be coupled to questionable deals that may profit UK industry but do little for the country in need.

Ambitious plans

The pledge comes at a time when many Western governments - under budgetary pressure - are scaling back their direct aid contributions.

Japan, the world's second-biggest donor, cut its budget last year and is believed likely to do so again soon.

In November last year, Mr Brown hitched his wagon to an ambitious initiative from the UN, which aims to boost aid from the rich world by $50bn a year to almost $100bn.

Over the next 14 years, the UN aims to halve global poverty, reduce infant mortality by two-thirds, and make primary education available to all the world's children.