A £1billion foreign aid fund intended to reduce conflict around the World risks wasting money and doing harm by fuelling corruption and eroding public trust, an official report has found.

The Independent Commission on Aid Impact raised concerns that projects under the cross-Government conflict fund are poorly managed with no "indicators, baselines, targets or milestones".

The commission, which scrutinises taxpayer-funded UK aid, gave the fund an aid spending rating of "amber-red" which means it has "unsatisfactory achievement in most areas," and "improvements are required for UK aid to make a positive contribution."

It said: "While our findings are not necessarily representative of the entire portfolio, they do suggest that weaknesses in programme management in the CSSF [the fund] may be compromising effectiveness and value for money."

It said that despite the Government's aim of doing "no harm" with foreign aid spending, there was a risk that some spending was fuelling corruption and reducing public trust.