Cameron offers Pakistan £650m helping hand

David Cameron has offered £650m in aid, improved trade in goods and services and enhanced security co-operation to Pakistan to patch up relations after a sharp disagreement last year.

On his first visit to the state since becoming Prime Minister, Mr Cameron called for a “fresh start” to relations between Pakistan and the UK, nine months after he sparked fury in Islamabad by accusing it of turning a blind eye to the export of terror.

Mr Cameron went out of his way to praise the efforts of President Asif Ali Zardari’s government to clamp down on militants but still faced tough questioning from Pakistani journalists over his “obnoxious” comments last July.

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He was also pressed on his plans to limit student visas, Britain’s failure to extradite former military ruler Pervez Musharraf and the reportedly shaky position of Muslim Cabinet Minister Baroness Warsi.

The announcement of £650m over four years to get four million more Pakistani children into school will make the country the single largest recipient of UK aid.

Mr Cameron acknowledged that the gift will spark disquiet at home at a time when school budgets are being cut in the UK and Pakistan has just ordered six new submarines from China.

He insisted he would “struggle to find a better example of a country where it is more in our interests as Britain to see progress and success than Pakistan”, because of the contribution it could make to halting extremism, terror and illegal migration.

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But he also warned his hosts they must do more to provide for their own public services, by reforming their tax system and making sure the rich pay their fair share.

British officials said that the new aid money was dependent on Pakistan – which has 17 million children not in school – showing that it was spending the aid effectively.

Money to train 90,000 teachers, build or refurbish 8,000 schools and provide six million text books will be “backloaded”, so the first year’s funding of £60m will be followed by significantly larger tranches only if it shows results.

Mr Cameron and his Pakistani counterpart Yusuf Raza Gilani also signed an Enhanced Strategic Dialogue document including a pledge to increase trade in goods and services to £2.5bn by 2015.

And they jointly chaired the first meeting of the UK-Pakistan National Security Dialogue, bringing together military and intelligence chiefs with political leaders from both sides.