The Government is pumping more than half a billion pounds of aid into war-torn Somalia – despite accepting there is ‘certain’ risk of funds being diverted by terrorist groups such as Islamic State and al-Shabaab.

The revelation comes in a confidential 41-page business plan drawn up by DFID.

The document, leaked to The Mail on Sunday, outlines strategy until 2020, and is marked ‘Official Sensitive’ on every page.

'Alarming': Tax-payers money could be stolen by terrorism groups including Al-Shabaab (pictured)

In a detailed ‘risk register’, it rates the probability of taxpayers’ funds being ‘misused or diverted by listed terror groups or criminal gangs’ as ‘certain’ and ‘likely to grow in the next six to 12 months’ as tensions rise ahead of elections.

It also accepts there is a similar ‘certain’ risk rating – highlighted in red – that consultants will be unable to travel to insecure areas to monitor spending.

‘This is so alarming,’ said one Minister. ‘The public will be deeply concerned that their hard-earned cash is literally being handed out to terrorist organisations.’

Ian Austin, the Labour MP for Dudley North, said he planned to table questions to Ministers. ‘Taxpayers will be horrified to find their money is going to terrorists at a time when police forces here are having budgets cut and officers are losing their jobs,’ he added.

Other leaked papers expose that Britain is still sending bilateral payments to India worth £70 million this year, despite pledges to end such transfers last year amid concerns over funding a nation with its own aid agency and a sophisticated space programme.

They also show Britain is giving cash to countries, including major aid recipients, despite high risks of corruption and concerns over the effectiveness of projects.

DFID officials admit that despite international diplomatic efforts in Somalia led by former Prime Minister David Cameron, large parts of the country are insecure and that the al-Shabaab group ‘appears to have had a resurgence’.

‘The public will be deeply concerned that their hard-earned cash is literally being handed out to terrorist organisations'. Pictured, Al-Shabaab fighters in Mogadishu

Yet the UK is doling out £568.4 million, despite the document admitting ‘Somalia remains an inherently high-risk operating environment.’

Officials set out tactics for mitigating such problems, including use of ‘trusted partners’ on the ground.

But the shocking revelations will fuel concerns that British cash is being misspent as billions are diverted into fragile states, worsening rather than alleviating problems.

Earlier this year, there was fury among many MPs after this newspaper revealed that British aid was ending up in the pockets of Palestinian terrorists.

There have also been cases of aid being ‘taxed’ or stolen in conflict zones by groups such as al-Shabaab, the fanatics behind the 2013 slaughter in a Kenyan shopping centre.

A leaked UN report has warned of ‘high level and systematic abuses’ by Somali government officials who have passed weapons to the group.

Al-Shabaab: The revelation comes in a confidential 41-page business plan drawn up by DFID

In recent months, Islamic State has become more active in Somalia, even briefly capturing a town in the semi-autonomous Puntland region six weeks ago.

The 18 draft and final business plans cover 16 countries, the continent of Africa, and climate change strategy.

For all the discussion of value for money, poverty reduction and risk protection, they make alarming reading as the British aid budget soars to £16 billion by 2020.

From Mozambique to Malawi, officials admit there are high chances of corruption. In Pakistan – our biggest aid recipient, getting £375 million this year – analysts admit that human rights and space for civil society are on ‘a downward trajectory’.

DFID accepts there is a risk that its ‘programme delivery will be associated with unintended, negative consequences’.

Ethiopia, the second biggest aid recipient, is receiving £332 million, with much of the money funnelled through government systems.

Officials say this is ‘acceptable’, although ‘opposition political parties, independent media and formalised civil society organisations are constrained’.

DFID sources said there was always risk working in conflict zones: ‘We have robust plans to mitigate against this but, on occasion, losses will occur. We are rigorous in investigating any concerns relating to funding.’

The source added that they were investing in India’s poorest people, of whom there are still 290 million, in line with previous pledges to generate growth and jobs.

FOREIGN AID FAT CAT'S DIRTY TRICKS TO GET INSIDE INFORMATION Raja Dasgupta, a former employee of the Department for International Development Raja Dasgupta, right, a former employee of the Department for International Development obtained confidential files showing where the Government planned to invest taxpayers billions in foreign aid projects. He sent this information to his new bosses at Adam Smith International to help them with bids for a slice of lucrative DFID contracts such as... £147 MILLION FOR CONGO The confidential DFID reports says Britain pushed up spending to £147 million this year in the Democratic Republic of Congo, despite ‘endemic corruption’. It admits the country is a challenge, with ‘huge’ constraints on private-sector investment. ASI boasts on its website of designing and implementing a £50 million scheme to develop markets in the country. The confidential DFID reports says Britain pushed up spending to £147 million this year in the Democratic Republic of Congo £80 MILLION FOR MALAWI DFID spends nearly £80 million a year in Malawi as lead donor with ‘high levels’ of political access. It accepts the state ‘is not conducive to supporting sustained poverty reduction… with policy-making often driven by personal rather than public interests’. It plans to put extra cash into anti-corruption measures – and ASI’s previous work there has included a project in this field. DFID spends nearly £80 million a year in Malawi as lead donor with ‘high levels’ of political access £93 MILLION FOR NEPAL DFID plans to ‘rebalance’ its spending in Nepal, where it is handing out £93 million this year. It admits ‘trying to do too many things… in a very unstable political environment with high fiduciary and corruption risks.’ But it retains ‘a high risk appetite.’ ASI has run six lucrative schemes in the country, including helping ginger farmers and providing privatisation advice. DFID plans to ‘rebalance’ its spending in Nepal, where it is handing out £93 million this year Advertisement

STEPHEN TWIGG, Chairman of the International Development Committee says: This is serious...Commons WILL act

Stephen Twigg, Chairman of the International Development Committee

The Mail on Sunday today reports on evidence submitted in June to the International Development Committee, which I chair.

We take very seriously our duty to ensure that British taxpayers’ money is well spent and that the Government delivers value for money.

Earlier this year, concerns were raised about the use of contractors by the Department for International Development, including by this newspaper.

We looked into this by asking if contractors deliver value for taxpayers’ money, and looking at how well DFID manages relationships with contractors.

We asked for written evidence. This was followed by a public session of the committee, during which we heard from critics and representatives of major contractors used by DFID.

Today’s allegations are serious and concerning. We did receive written and oral evidence from Adam Smith International. It is sometimes the case that Select Committees will discuss evidence submitted to them that may lead to the submission being revised or updated before it is published.

I will be taking the allegations made in today’s Mail on Sunday to the full International Development Committee and recommending we investigate them fully.

This week Secretary of State Priti Patel published long-awaited reviews of UK aid and development. We take evidence from her later this month.