Britain has suspended all financial aid to Uganda over a corruption scandal in which millions in donor funds were allegedly embezzled in the office of the prime minister, Amama Mbabazi.

Britain's international development department, or DFID, said in a statement on Friday that it was suspending development assistance immediately "as a result of initial evidence" from an ongoing audit.

Britain planned to give £27m (about $42m) to the East African country this year.

Justine Greening, international development minister, said payments worth £11.1m ($17.6m) that were due before
the end of the financial year had been halted.

"Unless the government of Uganda can show that UK taxpayers' money is going towards helping the poorest people lift themselves out of poverty, this aid will remain frozen," the international development ministry said.

"We will expect repayment and administrative and criminal sanctions."

Inquiry sought

Britain, Denmark, Ireland and Norway had already suspended aid to the office of the prime minister following claims that staff funnelled 10m euros ($12.7m) from an aid programme into private  accounts.

Mbabazi has expressed shock over the scandal, saying it must be investigated. However, some politicians have called for an inquiry into his role in the scam.

Uganda's auditor general reported last month that money intended to help develop areas devastated by the war against the Lord's Resistance Army (LRA) rebels had been stolen.

The report, released last month, said that the funds were lost through widespread fraud and embezzlement, with a network of officials perpetrating a scam in which some of the money was deposited into the private accounts of individuals.

The report documented numerous cases of forgery to justify fictitious expenses, and an accountant has since been
taken to court over the scam.

A dozen Ugandan officials have been suspended pending investigations.

Source: Agencies