Officials concealed from parliament how US is allowed to bring weapons on to British soil in defiance of treaty

British and American officials colluded in a plan to hoodwink parliament over a proposed ban on cluster bombs, the Guardian can disclose.

According to leaked US embassy dispatches, David Miliband, who was Britain's foreign secretary under Labour, approved the use of a loophole to manoeuvre around the ban and allow the US to keep the munitions on British territory.

Unlike Britain, the US had refused to sign up to an international convention that bans the weapons because of the widespread injury they cause to civilians.

The US military asserted that cluster bombs were "legitimate weapons that provide a vital military capability" and wanted to carry on using British bases regardless of the ban.

Whitehall officials proposed that a specially created loophole to grant the US a free hand should be concealed from parliament in case it "complicated or muddied" the MPs' debate.

Gordon Brown, as prime minister, had swung his political weight in 2008 behind the treaty to ban the use and stockpiling of cluster bombs. Britain therefore signed it, contrary to earlier assurances made by British officials to their US counterparts.

The US had stockpiles of cluster munitions at bases on British soil and intended to keep them, regardless of the treaty.

When the bill to ratify the treaty was going through parliament this year, the then Labour foreign ministers Glenys Kinnock and Chris Bryant repeatedly proclaimed that US cluster munition arsenals would be removed from British territory by the declared deadline of 2013.

But a different picture emerges from a confidential account of a meeting between UK and US officials in May last year.

It shows that the two governments concocted the "concept" of allowing US forces to store their cluster weapons as "temporary exceptions" and on a "case-by-case" basis for specific military operations.

Foreign Office officials "confirmed that the concept was accepted at highest levels of the government, as that idea had been included in the draft letter from minister [David] Miliband to secretary [of state Hillary] Clinton".

US cluster munitions are permanently stored on ships off the coast of the Diego Garcia airbase in the Indian Ocean, the cables reveal. The base is crucial for US military missions in the Middle East. Diego Garcia, still deemed British territory, has been occupied by the US military since its inhabitants were expelled in the 1960s and 1970s. The British concept of a "temporary exception" to oblige the US does not appear to be envisaged in the treaty. But the British arranged that "any movement of cluster munitions from ships at Diego Garcia to planes there, temporary transit, or use from British territory ... would require the temporary exception".

Nicholas Pickard, head of the Foreign Office's security policy unit, is quoted as saying: "It would be better for the US government and HMG [the British government] not to reach final agreement on this temporary agreement understanding until after the [treaty] ratification process is completed in parliament, so that they can tell parliamentarians that they have requested the US government to remove its cluster munitions by 2013, without complicating/muddying the debate by having to indicate that this request is open to exceptions."

Lady Kinnock subsequently promised parliament that there would be no "permanent stockpiles of cluster munitions on UK territory" after the treaty as the US had decided it no longer needed them on British soil.

There is no suggestion that Kinnock or Bryant were aware of a plan to mislead parliament.

Tonight, a Foreign Office spokesman said: "We reject any allegation that the Foreign Office deliberately misled parliament or failed in our obligation to inform parliament. We cannot go into specifics of any leaked documents because we condemn any unauthorised release of classified information."

David Miliband declined to comment.

Cluster bombs drop large numbers of "bomblets" over a wide area. Many do not explode at the time but can kill long afterwards. The Americans dropped thousands of cluster bombs in Afghanistan and Iraq. Civilians in Vietnam still die from cluster bombs dropped by the US in the 1960s.

The leaked US state department documents reveal American displeasure at the international project launched by Norway to outlaw cluster munitions. An American arms control diplomat, John Rood, privately told the Foreign Office in 2008 that the US disliked this initiative, called the Oslo process. The Americans denounced it as "impractical and unconstructive" and were urging countries not to sign up.

Mariot Leslie, then director general of defence and intelligence in the Foreign Office, reassured him that the British were only taking part as a "tactical manoeuvre" and cluster bombs were "essential to its arsenal". "The UK is concerned about the impact of the Oslo process on the aftermath of a conflict, foreseeing 'astronomical bills' handed out to those who used cluster munitions in the past," Leslie is recorded as saying.

But two weeks later Brown defied military opposition and went ahead in banning British cluster munitions.

Afghanistan, which had suffered grievous civilian casualties from the continuing war on its territory, also unexpectedly signed up to the treaty in December 2008 "without prior consultation with the US government" and "despite assurances to the contrary from President Karzai".

Washington's reaction was to seek to convince the Kabul government that the US could still legally use cluster munitions on Afghan territory under the treaty, even if the Afghan regime itself could not.

Diplomats recommended a "low-profile approach" at "sub-ministerial level ... given the political sensitivities in Afghanistan surrounding cluster munitions, as well as air and artillery strikes in general".