The water cannon are already in Indonesia and clearly they will not be returned. But Ministers have discovered that they must be able to prove that the situation on the ground has changed materially since the last government agreed to export licences for the jets and armoured cars, if they want to cancel the contracts without financial penalty.

They apparently believe that, not only can they not prove that the situation has changed, but they have found no evidence that the Hawk jets have been or are being used against political opponents in Indonesian-occupied East Timor.

In fact they believe that the aircraft would be totally unsuitable in East Timor because the speed of the aircraft would make them unsuited to attacking small groups of opponents on the ground.

About half of the 100 Saracen light tanks are believed to have been completed.

Labour backbenchers have been vocal in their criticism of the Government, in particular the chairman of the Parliamentary Human Rights Group, Ann Clwyd.

It is thought that any future request for military equipment from Indonesia would be governed by a new set of tougher guidelines for export licences to be unveiled by the Foreign Secretary next week.