The world's cuddliest diplomats are out of a job. China will no longer give giant pandas to foreign countries as a way of improving international relations, the domestic media has reported. Ending an ancient tradition, wildlife officials said the endangered animals would only be lent for breeding and biological research.

But questions are likely to be raised about the financial motives behind a decision that looks likely to boost the lucrative business of renting out the animals to zoos for as much as $1m (£490,000) a year.

Panda diplomacy dates back more than a thousand years. Tang dynasty records show that two of the bear-like beasts were presented to the Japanese court during the reign of the empress Wu Zetian (624 to 705). The practice reached its peak in the early 1970s, when Mao Zedong sent the furry black-and-white ambassadors across the globe on a diplomatic charm offensive. A breakthrough summit with Richard Nixon in 1972 was sealed with the gift of Hsing Hsing and Ling Ling. Two years later the British prime minister Edward Heath was rewarded for his friendship with the present of Chia Chia and Ching-Ching to London's zoo.

These days the world's fastest growing major economy is more likely to seek international influence through trade, aid and investment. Conservationists are also concerned that pandas are too rare to be given away as diplomatic trophies.

There are believed to be only 1,600 pandas in the wild, living in the nature reserves of Sichuan, Gansu and Shaanxi provinces. But the captive population has made a comeback in recent years, providing a ready supply for foreign zoos. Even so, according to ChinaNews, the age of the free panda friendship symbol is over.

"The Chinese government has stopped giving pandas as gifts abroad. We will only be conducting research with foreign countries," the website quoted Cao Qingyuan, a state forestry administration spokesman, as saying.

But airlines have not seen their last panda passengers. Under an international research and breeding programme the forestry administration rents them out on 10-year leases. The charge to foreign zoos depends on a a number of factors, including visitor revenues. In the US and Japan the yearly fees are about $1m. Extra payments are made if the pandas give birth.

This summer the mainland presented a pair of pandas to Hong Kong to mark the 10th anniversary of the handover from British rule. Two others have been offered to Taiwan, but, with cross-straits relations fractious, they have not yet left their birthplace in Wolong, Sichuan province.

Mr Cao said the gifts to the two Chinese islands were a special case of "sending pandas between brothers".

Backstory

President Richard Nixon's trip to China in 1972 ended 25 years of isolation between the US and the People's Republic and resulted in the establishment of diplomatic relations in 1979. As a result, China gave the US two pandas. In this edited conversation, Nixon and his wife Pat discuss the animals' impending arrival in Washington:

Richard Nixon The weather's good here, they [the pandas] can live in this kind of weather when they get here. We don't know when it [the arrival] is, but around the first of April, if you're here, it'd be awfully nice if you go out [to meet them]

Pat Nixon Oh, yeah. I'd like to ...

Richard Nixon Ya know, and uh, it's ... it's gonna be a hell of a story.