The government's aid policy to the Palestinian Authority is in "utter confusion" after a report that all such funding should be suspended was contradicted days later - and then apparently reversed again.

According to last Friday's Sun, International Development Secretary Priti Patel ordered her civil servants to "freeze" all aid to the PA, over fears that the money was being diverted to fund terrorism.

The move was widely welcomed by groups including the Board of Deputies and both the Conservative and Labour Friends of Israel.

Money for state employees in Gaza has reportedly been transferred to the PLO, while a Hamas bomber was allegedly given £100,000. Other such "salaries" are reported to have been given to families of suicide bombers and teenagers attacking Israel.

But on Monday morning, a DfID source said the earlier report was "incorrect and funding would be continued".

A separate, senior, source contacted by the JC said the government feared the PA could "collapse" without UK aid. However the insider added that further funding had indeed been "postponed, to allow reviews to take place and address concerns." It is understood no further aid had been scheduled to be paid to the PA this year.

In a later statement, on Monday evening, DfID said: "The UK remains firmly committed to supporting the Palestinian Authority to build and strengthen the institutions needed for a two-state solution, which is essential for the prosperity and security of the region."

Joan Ryan MP, LFI chair, said: "The Department for International Development's policy appears now to be in a state of utter confusion.

"Along with my colleague Ian Austin, I am seeking an urgent meeting with Priti Patel in order that we may get some clarity on this incredibly important issue."

CFI's Honorary President Lord Polak said: "DfID's suspension whilst investigations are ongoing is a very important and welcome step towards peace. It sends a wake-up call to the Palestinian Authority. Priti Patel, has acted quickly to challenge a long-standing abuse of well-intentioned international aid money".