USAid, the US government's international development agency, has been forced to suspend an English language teaching programme in the Philippines after two US congressmen claimed that it threatened US jobs.

The Job Enabling English Proficiency (Jeep) programme, which has provided English classes to up to 5,000 university graduates on the religiously divided island of Mindanao since 2009, was suspended last month after congressmen Tim Bishop and Walter Jones accused USAid's chief, Rajiv Shah, of "investing taxpayer dollars in outsourcing training programmes in the Philippines at the expense of American workers".

The Democratic and Republican members of the House of Representatives claimed in a letter to Shah that USAid was "actively funding the training of foreign workers for call-centre jobs outsourced by US companies".

USAid has rejected this accusation but in a worrying show of acquiescence to political lobbying, the agency suspended the Jeep programme within days, saying that it will carry out a review of the facts.

The Jeep programme is part of USAid's wider Growth with Equity Mindanao project to build infrastructure and opportunities on the conflict-scarred island.

According to Nisha Biswal, USAid Asia bureau's assistant administrator, the claims by the congressmen that Jeep students have been given training in call-centre skills are unfounded. She says that the two-year English language course aimed at university students who are close to graduation, and delivered in partnerships with 26 higher education establishments, contains no specific job-related training.

Instead USAid is investigating whether marketing material for Jeep courses produced by partner institutions "inferred" that the classes would prepare students to work in call centres.

"The concern for us is that the marketing material does not comply with the intent of Jeep. The programme does not offer training in skills related to any specific job," Biswal said.

The withdrawal of USAid support will have limited impact, as Jeep was scheduled to end in August. Current students have completed their courses and very little of the $1.45m budget is left to be spent, Biswal said.

But the speed of response by USAid illustrates the sensitivity of its English language and skills training projects, part of a global education programme with a total budget of $523m in 2011.

Bishop and Jones claim that more than 500,000 US call-centre jobs have gone offshore since 2007. The Philippines, with its English-proficient workforce, has become a leading provider of call-centre and back-office services to US companies.

In 2010 Bishop intervened to shut down a USAid training project in Sri Lanka that he claims was offering high-tech skills development. In December he introduced legislation that would have the effect of making US firms that outsource call-centre jobs abroad ineligible for government financial assistance for up to five years.

But USAid says that its English language training is in line with government policy. "We believe very strongly that our ELT programmes meet USAid's guidelines. Our projects assist developing nations by providing access to skills which help those countries develop their economies and in turn increase trade and investment opportunities for the US," Biswal said.