Britain needed money for reconstruction and importing food

The payments of $83.25m (£42.5m) to the US and US$22.7m (£11.6m) to Canada are the last of 50 instalments since 1950.

The amount paid back is nearly double that loaned in 1945 and 1946. "This week we finally honour in full our commitments to the US and Canada for the support they gave us 60 years ago," said Treasury Minister Ed Balls.

"It was vital support which helped Britain defeat Nazi Germany and secure peace and prosperity in the post-war period. We honour our commitments to them now as they honoured their commitments to us all those years ago," he added.

The last payments will be made on Friday, the final working day of the year.

Deferred

Under the lend-lease programme, which began in March 1941, the then neutral US could provide countries fighting Adolf Hitler with war material.

The US joined the war soon after - in the wake of the attack on Pearl Harbour - and the programme ended in 1945.

Equipment left over in Britain at the end of hostilities and still needed had to be paid for.

The US loaned $4.33bn (£2.2bn) to Britain in 1945, while Canada loaned US$1.19 bn (£607m) in 1946, at a rate of 2% annual interest.

Upon the final payments, the UK will have paid back a total of $7.5bn (£3.8bn) to the US and US$2 bn (£1bn) to Canada.

Despite the favourable rates there were six years in which Britain deferred payment because of economic or political crises.

There are still World War I debts owed to and by Britain. Since a moratorium on all debts from that conflict was agreed at the height of the Great Depression, no repayments have been made to or received from other nations since 1934.