The Palestinian Authority flag. Photo: Wikimedia Commons.

The British government has launched an official investigation into how it spends taxpayer money in funding Palestinian territories, the Jewish Chronicle reported on Thursday.

According to the report, the decision to set up the inquiry came after allegations that government funds were being used by the Palestinian Authority (PA) towards paying the salaries of convicted terrorists and projects aimed at inciting violence against Israel.

A spokesman for the Department for International Development (DfID) — the government agency leading the investigation — was quoted by the Chronicle as stating that it “is already undertaking a review of its program in the Occupied Palestinian Territories as part of its Bilateral Aid Review, to consider how it can best support the progress towards a negotiated two-state solution.”

DfID Secretary of State Justine Greening, who is in charge of the review, has already been contacted by senior officials from both Conservative Friends of Israel (CFI) and Labour Friends of Israel (LFI) regarding the probe, the report said.

CFI chairman, Sir Eric Pickles, told the Chronicle that while “we don’t want to see money cut to people living under the PA…it would be much more sensible to start moving funding to something that encourages the peace process, that makes the possibility of a two-state solution more likely.”

Pickles sent a list last week to Greening of co-existence projects the government should consider funding, the report said. “I have asked if we can focus more funding more on projects that are committed to peace, and less on institutions. She has been very receptive to it,” he said.

Speaking to the Chronicle on Friday, MP Joan Ryan, chair of LFI, criticized the government’s initial review of its aid to the Palestinians, calling it “simply smoke and mirrors.”

“This is the department which — even last month — was showing amazing nonchalance in the face of the serious allegations that the Palestinian Authority is deceiving international donors and, in fact, continuing to effectively pay salaries to convicted Palestinian terrorists,” she said.

“This is an issue which has been put to the department repeatedly over recent years and which is has consistently and repeatedly failed to act on. It’s also the department which — for at least three years — has been telling my LFI colleagues that it’s committed to funding more coexistence projects which bring Israelis and Palestinians together but which, we find, is investing only 13 percent of the Conflict Stability and Security Fund spend in Israel-Palestine on such work,” Ryan stated.

According to an investigation by the Daily Mail, some £72 million ($102.6 million) was given last year to the PA in foreign aid and squandered away. In several instances of unlawful spending by the Palestinians cited by the paper, £8 million ($11.4 million) was allocated to build a new palace and one Hamas master terrorist was paid a salary of £100,000 ($142,500).