The government has suspended a multimillion-pound foreign aid project amid allegations that money paid to a contractor in Syria was reaching the pockets of jihadist groups.
The plug was pulled on the scheme funding a civilian police force following claims its members were being made to hand cash to extremists.
Officers from the Free Syrian Police were apparently also working with courts accused of torture and summary executions according to allegations made in a BBC Panorama documentary due to air on Monday evening.
The Foreign Office confirmed on Sunday night that it had suspended the access to justice and community security scheme (Ajacs), which has been running since late 2014, following grave concerns about its management by the British contractor, Adam Smith International.
Britain is one of six countries supporting the community-led police force set up after the Syrian uprising and stationed in regions held by opposition rebels.
According to documents seen by Panorama, police officers in Aleppo province were forced to hand over cash to the extremist group in control of the area, Nour al-Din al-Zinki.
The programme, Jihadis You Pay For, also claims that the Syrian branch of al-Qaida, Jabhat al-Nusra, had handpicked police officers for two stations in Idlib province.
Other evidence suggested dead and fictitious people were on the force’s payroll.
Adam Smith International, which strongly denies the allegations, said it had managed taxpayers’ money “effectively to confront terrorism”.
When the company visited one police station, supposedly the base for 57 police officers, it could not find a single officer, the investigation found.
The contractor said it accounted for the officers on subsequent visits and that it had found very few instances of dead officers remaining on the salary list in Syria.
It said it used cash because there was “no practical alternative” and that officers imposed by Jabhat al-Nusra were detected within two months.
Payments to the stations funding the extremist group Nour al-Din al-Zinki were stopped in August 2016, it added.
In a statement published on Sunday, Adam Smith International said Panorama’s allegations about the Ajacs project were “false and misleading”.
It said: “ASI has managed the project successfully alongside our partner in an extremely challenging high-risk environment under the close supervision of the Foreign and Commonwealth Office and five other governments.”
Kate Osamor, Labour’s shadow secretary of state for international development, said that if the allegations were true, British taxpayers would be “rightly outraged”.
She said: “We need to understand how the Foreign and Commonwealth Office allowed this to happen, and why their mechanisms for properly managing aid projects failed.
“The opaque Conflict, Stability and Security Fund that financed this project also operates in 70 other countries – many with questionable human rights records.
“This investigation is likely to be only the tip of the iceberg: the government must now open up its books so the public can understand the true extent of the problem.”
Funds come from Britain’s £13bn foreign aid budget which is allocated largely by the Department for International Development but also spent by other departments including the Foreign Office.
An FCO spokesman said: “We take any allegations of co-operation with terrorist groups and of human rights abuses extremely seriously and the Foreign Office has suspended this programme while we investigate these allegations.
“We believe that such work in Syria is important to protect our national security interest but of course we reach this judgment carefully given that in such a challenging environment no activity is without risk. That is why all our programmes are designed carefully and subject to robust monitoring.”