British aid to India is to be brought to an end in 2015 in recognition of the booming sub-continent's "changing place in the world".
The UK's controversial programme of direct financial assistance to India will be wound down over the next three years after International Development Secretary Justine Greening announced an immediate halt to any new commitments.
The move prompted criticism from some humanitarian organisations, who warned that British aid still made a difference to the poor of India despite the country's increasing wealth. But it will delight many Tories who have taken issue with David Cameron's continued commitment to overseas aid despite large spending cuts at home.
After 2015, UK support for India will consist of technical assistance, with the provision of development expertise which officials said would still cost about one tenth of the current programme. But there will be no more direct aid, which has been running at £280 million a year since Ms Greening's predecessor Andrew Mitchell reduced it last year.
While aid programmes in India that are already under way will be completed as planned, no new ones will be signed off, reducing intended spending between now and 2015 by about £200 million.
Ms Greening, who took responsibility for Britain's aid budget in September, announced the change after discussions with the Indian government this week. "Having visited India I have seen first hand the tremendous progress being made. India is successfully developing and our own bilateral relationship has to keep up with 21st century India. It's time to recognise India's changing place in the world," she said.
"It is of course critical that we fulfil all the commitments we have already made, and that we continue with those short-term projects already under way, which are an important part of the UK and government of India's development programme."
Critics of Britain's continued spending on Indian development point to the country's massive budget, which funds a space programme. Indian finance minister Pranab Mukherjee last year said the country no longer wanted or needed British aid, describing the money as "a peanut in our total development expenditure".
But Oxfam raised concern that the ending of financial aid to India may be "too hasty", warning that the scale of the poverty challenge there remained "huge".
The charity's director of campaigns and policy, Phil Bloomer, said: "We're concerned that completely withdrawing British aid to India by 2015 is too hasty. It's crucial that we don't cut off money which gives a lifeline to poor families, and a third of the world's poorest people live in India."