President Barack Obama today made the most contentious move of his young administration with an order, overturning a ban on federal funds to foreign family planning organisations that either offer abortions or provide information or counselling about abortion.

The rule change continues the dismantling of George Bush's conservative policies. It is likely to encounter fierce criticism from the still robust anti-abortion movement.

It will allow US aid, usually through the US agency for international development, to flow to HIV/Aids clinics, birth-control providers and other organisations that advocate or provide counselling about abortion across the world. It is known as the "global gag rule" because it denies US taxpayer dollars to clinics that even mention abortion to women with unplanned pregnancies.

The rule was signed by President Ronald Reagan in 1984, overturned by Bill Clinton in 1993, and reinstated by Bush. Critics of the rule say it deprives the world's poor women of desperately needed medical care, while proponents say US tax dollars should not promote abortion.

Family planning groups in America and the UK cheered the rule change. Dr Gill Greer, director general of London-based International Planned Parenthood Federation, estimated the gag rule had cost the group more than $100m for family planning and sexual and reproductive health programmes during the eight years of the Bush administration, which she said amounted to 36 million unplanned pregnancies and 15 million induced abortions.

"The gag rule has done immense harm and caused untold suffering to millions around the world," she said in a statement. "It has undermined health systems and endangered the lives and health of the poorest and most vulnerable women on the planet by denying access to life saving family planning, sexual and reproductive health and HIV services and exposing them to the dangers of unsafe abortion."

While Obama has spent the first two days of his presidency overturning Bush policies, for example restricting US interrogation practices of terror suspects and an order pledging to close the US prison at Guantánamo Bay, Cuba, those were backed by a broad political consensus. Abortion, however, remains a bitterly contentious issue, as evidenced by the thousands of people who marched in Washington yesterday opposing abortion rights.

Yesterday was the 36th anniversary of the landmark Supreme Court decision Roe v Wade, which guaranteed a woman's right to choose abortion.

While both Clinton and Bush used the Roe v Wade anniversary to change US policy on abortion, Obama declined yesterday. He instead issued a statement reaffirming his commitment "to protecting a woman's right to choose".

"On the 36th anniversary of Roe v Wade, we are reminded that this decision not only protects women's health and reproductive freedom, but stands for a broader principle: that government should not intrude on our most private family matters," he said.

The rule comes as no surprise. During the president campaign Hillary Clinton, who as secretary of state will oversee foreign aid, pledged to end the rule.

The rule change "would be huge," California Representative Diana DeGette of Colorado told National Public Radio. "By the US restricting women's rights to reproductive planning internationally, it really destroys their lives. Because they can't control the size of their family, that affects their use of resources and food and child nutrition and so many other things. The way to increase the stability in Third World countries, frankly, is for sensible family planning."