A new supply of African blood diamonds is threatening to entrench the rule of Zimbabwean despot Robert Mugabe, just as Britain and other European countries plan to lift sanctions against the regime, it has been claimed.

Human rights charity Global Witness says money is being siphoned from diamond mines to finance a "parallel government" and its secret police force in Zimbabwe, helped by a Chinese businessman. It comes as a row brews over plans to lift travel restrictions and partial asset freezes imposed on some of President Mugabe's ministers by the EU.

At a special debate to be held in the Commons on Tuesday, former cabinet minister Peter Hain will urge the British government to keep measures already in place and to add more names, including those in a new Global Witness report, to the list of individuals and entities subject to sanctions.

Measures against Zimbabwe are to be reviewed by the EU at the end of this month, and there has been pressure to lift the "stigma" of sanctions to help the beleaguered country prepare for elections planned for some time next year. Whitehall sources say the government is happy to drop sanctions, although any lifting of the travel ban against Mugabe himself is "not on the table".

"I am extremely alarmed by this apparent drift in the government's concern for what's going on in Zimbabwe," said Hain. "Robert Mugabe has never to date shown any inclination to accept defeat at the polls, and I do not think sanctions should be lifted or relaxed."

Hain and other Zimbabwe-watchers have condemned any move to ease restrictions on the power-sharing government of national unity, formed after international outrage at a widely discredited election in 2008.

Instead, they want new sanctions to be imposed, including measures against Sam Pa, a Chinese businessman accused of legally funnelling money from diamond fields to forces propping up Mugabe's regime, which are orchestrating a smear campaign against his enemies and organising the oppression of opposition figures.

Hain said: "A new blood diamond phase is upon us and it's going to impact on the whole industry. I am worried that the British government seems to be prevaricating about sanctions. This is a decisive moment in Zimbabwean history. We could see a political move towards total transformation with free elections. All the evidence is that Mugabe and his cohort of thieves are still siphoning off more and more of the resources that the people of Zimbabwe so badly need, just to hang on to power."

The Global Witness report, Financing a Parallel Government?, claims Pa is behind one of the companies involved in Zimbabwe's diamond fields. Pa is also believed to be behind the purchase of trucks being used by operatives of the feared Central Intelligence Organisation, several of whom have been implicated in violent attacks on opposition members. Global Witness invited Pa to respond to its claims, but he has yet to do so.

The report also claims mining firm Anjin Investments is part-owned by the Zimbabwean defence ministry, has paid no taxes, and is not at present subject to sanctions.

Profits from the gems are also funding a smear campaign against Mugabe's political enemies, including the prime minister, Morgan Tsvangirai.

Nick Donovan of Global Witness said: "Our biggest concern is the risk that violence in the runup to the next election will be being funded independently, not only undermining democracy, but propping up the lifestyles of those who buy flashy cars and houses while people go without basic needs."

Last month, the Zimbabwean finance minister, Tendai Biti, a member of the opposition Movement for Democratic Change (MDC), expressed his concerns that taxes were not coming in from the diamond-mining companies, leaving him unable to fund the education and health services that the Zimbabwean people so desperately need. Biti said Anjin had not provided "a single cent" and there was a £385m shortfall in what the treasury had expected.

Biti said Anjin's opaque operations showed that Mugabe's claims that sanctions were the cause of the country's economic problems were false.

Pressure is on both the EU and on the Americans to lift sanctions. Navi Pillay, UN human rights commissioner, said earlier this year that the restrictions were damaging the Zimbabwean economy, and that South Africa and other Southern African Development Community countries are also keen to see them lifted.

But Hain will be backed by leading figures in the Commons, including the leader of the all-party committee on Zimbabwe, Kate Hoey MP.

She said it was clear that the succession battles, combined with a scrabble for a share of diamond wealth, had brought the ruling Zanu PF party "close to imploding", but that the focus for the UK had to be in ensuring as far as possible that next year's elections were "free and fair". "That's the game changer. As far as sanctions are concerned, then getting the balance right is essential. It's very unsettling to hear what Tendai Biti has to say. He has been able to do a lot so far, but if there's no money for him to plan a budget with, then he's powerless."

"There's a lot of pressure to lift sanctions. Sanctions are seen as political pariah by some, by a false stick that hurts no one by others. We're all concerned about the next step and I'm meeting with the Foreign Office this week to discuss the upcoming review.

"We've a direct interest as British taxpayers because we will be paying for the rebuilding of a shattered country when its all over. So if the proceeds of the country's resources are being siphoned out of the country then that is an important issue."

Jonathan Moyo, the former information minister and a member of the Zanu PF politburo, told Zimbabwean journalists last week that the "evil and illegal" sanctions "should never have been imposed in the first place".

He added: "It's very destabilising to say 'We are holding a big axe over your head if you don't run elections in a way that's acceptable to us' because it will be used by some political parties to get what they want. It will create a situation where it's heads, MDC wins and tails, MDC wins.

"If the Europeans want to help us, they must leave us to run our own affairs — we don't need to be treated like naughty children rewarded with sweets. It's a very patronising attitude."In WikiLeaks-released diplomatic cables, Moyo was said to have pressed America to introduce sanctions on certain members of his own party, Mugabe's Zanu-PF, leading to criticisms that the international community was being manipulated by individuals for their own gain.

Another member of the Mugabe cabinet said: "Who cares about travel bans to Europe? Its cold and unfriendly there and they are very arrogant if they think they can tell us what to do with our own Zimbabwean resources."