For the first time, the British government has refused to back billions of pounds of European Union spending on aid projects. The UK issued a statement criticising the European Commission of failing to offer the best value for money for European taxpayers by discriminating against British-based organisations that were seeking funding.

The statement, obtained by the Guardian, said the UK was “still waiting for a response to the concerns raised at a political level in August, including via secretary of state for international development’s letter to the commission of 23 August 2018, on the treatment of UK entities in the tendering process of EU programmes”.

According to the Guardian, the criticism was made in response to a commission decision to include clauses in its contracts with aid providers stating all funding will be terminated should there be a no-deal Brexit.

British NGOs have been further warned that unless they can commit to making good the loss of funding should the UK crash out of the EU, they should not compete for funds.

The British government also accused Brussels of putting at risk for the beneficiaries of EU development assistance “access to the best available expertise through open and fair competition, by discouraging UK organisations from bidding to implement programmes”.

The statement said: “We have an obligation to account to the UK parliament that UK overseas development assistance is spent effectively and delivers value for money, which extends to the partners delivering UK ODA”.

Claire Godfrey, the head of policy and campaigns at Bond, the UK network that represents 400 international development NGOs, said the attitude of the commission was “shameful”.

“At a time when the UK and EU should be working to reach an agreement on the future of aid and development cooperation, the EU is still refusing to remove the unfair clause stating that UK NGOs, who have world-leading expertise and experience, will no longer have access to funding post Brexit in the event of a no deal – despite the UK contributing to the joint pot, and the fact that we are an OECD country and therefore eligible for funding,” she said.

“By including the clause, the EU are continuing to effectively discriminate against UK NGOs, which could undermine efforts for future UK collaboration with European partners to deliver lifesaving aid effectively and efficiently.

“It’s shameful that we are in a standoff situation when it comes to aid and development to the world’s most vulnerable people – often these people are women and children living in extreme poverty or desperately trying to survive war.”