Tony Blair was at the centre of a Cabinet row last night after it emerged Downing Street was backing plans for the sale of a British-made military air traffic control system to Tanzania, one of the world's poorest countries, despite ferocious opposition from the chancellor, Gordon Brown, and the international development secretary Clare Short. 

Sources at the Treasury and the Department for International Development said Mr Brown and Ms Short would strongly oppose granting an export licence to the defence firm BAe Systems for the £28m project. The contract has been condemned as a waste of money by the World Bank for a country that has just eight military aircraft and a per capita income of £170 a year. 

Half of Tanzania's population lacks access to clean water and a quarter of children die before their fifth birthday. 

The deputy prime minister, John Prescott, has now been asked to intervene in the dispute over whether safeguarding 250 BAe jobs on the Isle of Wight should take precedence over Labour's commitment to development goals and an ethical foreign policy. 

Amid reports that No 10 has been using strong-arm tactics to win over the Foreign Office and the Department of Trade and Industry, Mr Prescott will chair a Cabinet committee meeting on the issue today. 
"The whole thing stinks," said one government source last night, adding that a World Bank-commissioned report had concluded Tanzania could buy a new civil air traffic control system for a quarter of the price of the BAe deal. 
Ms Short and Mr Brown believe Tanzania should use the benefits of a £1.4bn debt relief package announced by the World Bank and the International Monetary Fund last month to boost spending on health, education and basic infrastructure rather than on what one source called "unproductive" expenditure. 

"The prime minister has proudly talked about his Africa initiative" a government adviser said last night. "If he really cares about Africa this is a test case for him." 
The World Bank study is highly critical of the technology of the system, let alone the debt problems it will cause Tanzania. The report says the BAe system is "too expensive and not adequate for civil aviation". It said the system's transmitter has already been superseded and will need an expensive maintenance agreement unless this is underwritten by BAe. It adds that to protect the system during wartime will require "extremely expensive design specifications". 

The scheme was condemned yesterday by Oxfam, whose policy director, Justin Forsyth said: "The news that the government is thinking about agreeing this deal is deeply disturbing. It exposes a huge flaw in the UK arms export bill, which at the moment puts profits before people. The World Bank have said they won't touch this deal with a bargepole - the government should think very carefully about the impact it could have on the people of Tanzania."