David Cameron has rejected an MP's call for an independent review of how British taxpayers' money is used to fund the Palestinian Authority.

Labour Friends of Israel chair Joan Ryan had urged the Prime Minister to set up a cross-party inquiry into British cash being sent to the PA at a time when it was inciting violence against Israel.Ms Ryan called on the government to divert funding to NGOs promoting co-existence.

Mr Cameron said the government was closely monitoring allegations of PA incitement but backed the current arrangements for vetting the PA's use of the £25.5 million it is expected to receive directly from Britain in 2016.

In his response to Ms Ryan, seen by the JC this week, Mr Cameron said the Department for International Development's (DfID) financial assistance to the Palestinian group was used "to pay the salaries of civil servants, thereby delivering basic services, maintaining stability and reducing poverty".

The UK's funding was subject to "a thorough vetting process" and was based on the PA's commitment to non-violence and a negotiated solution to the conflict, he added.

Mr Cameron wrote to Ms Ryan that DfID was already undertaking a review of its funding "to consider how it can best support progress towards a negotiated two-state solution".

He said: "We are also open to considering your suggestion of increasing support… for strong co-existence projects."

The Prime Minister told Ms Ryan that more initiatives to bring Israelis and Palestinians together could be developed if they were likely to have a positive impact and represent value for money.

A Mail on Sunday investigation last month revealed that the PA was passing on millions of pounds to the Palestine Liberation Organisation (PLO) which was in turn giving it to convicted terrorists and their families.

Writing in the JC today, Ms Ryan said her own assessment of the money provided by Britain had shown a "pitiable" approach to supporting co-existence efforts.

Ms Ryan said she had calculated that less than 13 per cent of the £1.14m from the government's Conflict, Stability and Security Fund spent in Israel and the Palestinian territories was going towards "projects which bring the two peoples together".