The British government has taken the unprecedented step of refusing to endorse billions of pounds of EU spending on aid projects, as it accused the European commission of discriminating against UK-based organisations over Brexit.

In a vote among the 28 member states on the latest allocation of the bloc’s £26.5bn development budget, the UK government declined to give its support for aid spending for the first time.

It instead issued a statement accusing the commission of failing to offer the best value for money for European taxpayers by discriminating against British-based organisations that were seeking funding.

The criticism was made in response to a commission decision to include clauses in its contracts with aid providers stating all funding will be terminated should there be a no-deal Brexit.

British NGOs have been further warned that unless they can commit to making good the loss of funding should the UK crash out of the EU, they should not compete for funds.

A UK government statement explaining its abstention on plans for the European development fund (EDF) expressed particular frustration over the failure of the commission to respond to a letter of complaint from the international development secretary, Penny Mordaunt.

The statement, obtained by the Guardian, said the UK was “still waiting for a response to the concerns raised at a political level in August, including via secretary of state for international development’s letter to the commission of 23 August 2018, on the treatment of UK entities in the tendering process of EU programmes”.

The government said in its statement circulated to the other 27 member states and senior EU officials that the issue was of “critical importance and is having unnecessary negative consequences for ongoing and planned development programming”.

It further accused the commission of putting at risk for the beneficiaries of EU development assistance “access to the best available expertise through open and fair competition, by discouraging UK organisations from bidding to implement programmes”.

The statement said: “We have an obligation to account to the UK parliament that UK overseas development assistance is spent effectively and delivers value for money, which extends to the partners delivering UK ODA”.

The UK’s aid sector is widely regarded as one of the most effective and experienced in the world, with longstanding projects in some of the most difficult places to operate.

While the funding will be passed on to the successful applicants for contracts, as the UK was the only EU member state to abstain in the vote on 31 October, the abstention was a symbolic move highlighting the anger felt in Whitehall and the British aid sector.

The UK is a major donor to the EDF, of which it will remain a contributor until 2020, and whose goal is “poverty eradication, sustainable development and the gradual integration of the Africa-Caribbean-Pacific countries into the world economy”.

Mordaunt has already committed to filling any funding gaps for British NGOs should there be a breakdown in the Brexit negotiations, but it is feared that British organisations are still being passed over for contracts, or are being put off from competing for them.

The development is likely to inject fresh tension into Brexit negotiations at a critical time.

Claire Godfrey, the head of policy and campaigns at Bond, the UK network that represents 400 international development NGOs, said the attitude of the commission was “shameful”.

“At a time when the UK and EU should be working to reach an agreement on the future of aid and development cooperation, the EU is still refusing to remove the unfair clause stating that UK NGOs, who have world-leading expertise and experience, will no longer have access to funding post Brexit in the event of a no deal – despite the UK contributing to the joint pot, and the fact that we are an OECD country and therefore eligible for funding,” she said.

“By including the clause, the EU are continuing to effectively discriminate against UK NGOs, which could undermine efforts for future UK collaboration with European partners to deliver lifesaving aid effectively and efficiently.

“It’s shameful that we are in a standoff situation when it comes to aid and development to the world’s most vulnerable people - often these people are women and children living in extreme poverty or desperately trying to survive war.”