Ministers are coming under increasing pressure to justify their decision to give the green light to a £28 million air traffic control system in Tanzania.

Third world pressure groups and backbench MPs have called on the government on to explain why it has backed the deal for BAe to supply the "Watchman" system which will be funded by a £40 million bank loan.

The contract, which will safeguard 250 jobs in the UK, has already been signed and the system is waiting to be exported.

The government has suck rigidly to the line that it does not comment on individual export licences, largely to avoid the fact that the cabinet is split over the issue.

A government source defended the decision. "The government of Tanzania believes the system will bring much needed benefits in terms of safety, security and tourism."

Gordon Brown and international development secretary Clare Short were against it as both are staunch supporters of "sustainable" development. Brown has been instrumental in securing debt relief for Tanzania. They were both overruled by Tony Blair and the DTI at a cabinet meeting earlier this week.

Critics say Tanzania - one of the poorest countries in the world - does not need such an expensive system and that the cash would be better spent on health and education.

Tory MP Tony Baldry, chairman of the International Development Committee, said: "It is pretty ludicrous to expect Tanzania to be spending £28m on a military air traffic control system it does not need."

The World Bank and Oxfam have criticised the deal, saying the system is primarily designed for military purposes and is unsuitable for a country with a per capita income of little more than £200 a year.

Oxfam's head of policy, Justin Forsyth, said. "It is outrageous that Tanzania's debt relief will go towards bolstering the profits of BAE and Barclays bank rather than helping the poor people of Tanzania."

Jenny Tonge, the Liberal Democrat shadow international development secretary accused the government of paying lip service to its commitment to cut poverty.

"I am shocked that the prime minister has agreed to this deal. This makes everything he has said since September the 11 about reducing poverty in Africa a sham," she said.

"Tanzania cannot afford an air traffic control system for £28 million, furthermore they don't need one. In a country where a quarter of the population do not have access to healthcare, the £28 million would have paid for basic healthcare for 3.5 million people."