Britain has run out of ways to spend the £12billion annual foreign aid budget directly and resorted to stockpiling money which is earmarked for future projects, The Telegraph can reveal.

More than £5billion of taxpayer's money has been committed to international aid agencies but not yet spent as part of the Government's bid to meet its controversial aid target.

Last year nearly a fifth of Britain's foreign aid budget, equivalent to £2billion, was set aside for future spending by the World Bank and other agencies. Instead of spending the money directly on projects to alleviate poverty, the Government retains the money until the aid agencies are ready to use it.

It comes as Conservative MPs are calling for the Government to scrap its target of spending 0.7 per cent of national income on aid and instead divert money into the NHS and social care.