The government is being urged to stop “turning a blind eye” on British aid being used to pay the salaries of Palestinian terrorists.

It follows Norway’s decision to stop paying the Palestinian Authority after the organisation admitted that aid money was still being used to pay salaries to convicted murderers.

Michael McCann, a former Labour MP who now fronts a campaign group of the Zionist Federation, called for the Department for International Development (DfID) to withhold the £25 million it gives to Mahmoud Abbas’s Palestinian Authority.

McCann, the former vice-chair of Labour Friends of Israel who now leads the Israel-Britain Alliance, says DfID is “guilty of turning a blind eye to UK taxpayers’ money being used to incentivise murder”.

The Board of Deputies has backed the campaign, saying: “Until DfID can be absolutely sure that money is going to the right people, and not funding terrorists and incitement, we call for the aid to be suspended while a rigorous review takes place.”

Around 40 per cent of the Palestinian Authority’s budget is made up of donor aid from countries such as Britain and the United States, and earlier this month, Tory Philip Hollobone MP asked Secretary of State Justine Greening about funds used to pay convicts.

“Is this not corrupt practice, how is this an example of good governance, and would she consider following Canada’s example of actually making sure our aid goes to specific projects in the Palestinian Territories?” he asked in the Commons.