The US has confirmed it will cut $300m in aid to Pakistan over its perceived failure to tackle militant groups, ratcheting up the tension in a deeply strained relationship ahead of a visit to Islamabad by the secretary of state, Mike Pompeo, on Wednesday.

The so-called Coalition Support Fund was suspended earlier this year after Donald Trump tweeted that the US had received nothing but “lies and deceit” in return for $33bn (£25bn) of financial support to Pakistan since 2002.

On Saturday, a spokesperson for the Pentagon said that “due to a lack of decisive actions in support of the South Asia strategy, the remaining $300m was reprogrammed”, withdrawing for good a previous offer to unfreeze the funds if Pakistan took decisive action against militant groups.

The Trump administration says Islamabad offers sanctuary to Taliban fighters waging a 17-year war in Afghanistan, a charge Pakistan denies.

The Pentagon spokesman Lieut Koné Faulkner said the funds would be reassigned to other “urgent priorities”, following approval by Congress.

Imran Khan’s new government offered no immediate response but the prime minister has called for “more balanced” relations with the US and is seeking to shift Pakistan’s foreign policy away from a “clientalistic” relationship with the US, whose drone attacks and war on terror he blames for fostering extremism within Pakistan, towards allies closer in the region.

Analysts noted the timing of the Pentagon’s announcement may reflect irritation within Washington at Khan’s decision to welcome the Iranian foreign minister, Javad Zarif, as his first diplomatic guest and the former cricketer’s subsequent statements of support for the nuclear deal that Trump recently reneged upon.

“It was a very warm welcome,” said Sehar Tariq of the US Institute for Peace, “signalling a desire to work closely with Iran while the US is trying to shut co-operation could be seen as a direct contradiction [of American policy]”.

The Coalition Support Funds technically offer reimbursement to Pakistan’s military for its operations against terrorists, of which army officials often lament a lack of recognition – particularly given a drastic reduction in terrorist attacks within Pakistan since a campaign launched in 2014.

The loss of funds would not hurt the army immediately, Tariq said, but might affect its ability to replace ageing equipment. Meanwhile, scores of army officials have also been cut from coveted training and educational programmes in the US, Reuters reported this month, a blow to one of the hallmarks of a longstanding military alliance.

Last week, a scheduled call between Pompeo and Khan sparked controversy after Pakistan’s foreign minister, Shah Mehmood Qureshi, accused the US of lying by saying in a read-out that Pompeo had pressed the prime minister to take “decisive action” against terrorists.

Pompeo will face a particularly frosty welcome in Islamabad after recently counselling against an IMF bailout for Pakistan, whose fast-depleting foreign exchange reserves threaten financial crisis, because the money might end up repaying debts owed to China.