The government has highlighted its ethical foreign policy "achievements" after a committee of MPs strongly criticised it over arms sales to Indonesia.

A joint report by two committees said there has been a failure to implement the recommendations of the Scott inquiry into the arms-to-Iraq affair.

The report from the Commons Defence, Foreign Affairs, Trade and Industry and International Development Committees also accuses ministers of failing to review arms sales to Indonesia.

However Foreign Office Minister Peter Hain said the government had done more than any previous administration to tighten controls.

In a statement, Mr Hain said the Foreign Office would "look seriously" at the report's recommendations.

"But don't lose sight of what we have achieved." he added.

"We have established tough criteria to prevent the export of arms for internal repression and external aggression. We have banned the export of equipment which can be used for torture."

But Labour backbencher Ann Clwyd, a member of the International Development Select Committee, told BBC Radio 4's The World at One programme said she wanted a review of licences involving Indonesia.

"It seems to me quite wrong that we should be selling to such a country when we have clearly stated that we would not be selling arms to countries that might be using them for internal repression or external aggression," she said.

'Critical engagement'

The news follows last month's statement by Foreign Secretary Robin Cook that he was committed to "diplomacy for democracy".

In a speech last month, Mr Cook rejected what he called the "cynical view" that governments should not attempt to bring about change because it was impossible to make the world perfect.

Instead, he backed a doctrine of "critical engagement" with oppressive regimes - but he failed to mention the much-vaunted "ethical dimension".

The government, like the Conservative administration before it, has come in for constant criticism over the sale of Hawk jets to Indonesia.

When it came to power in May 1997, the Labour party promised "an ethical foreign policy. But the report has found there to be no "radical shift" in policy under Labour on defence sales to Indonesia.

It said the absence of a more robust policy meant the government was unable to revoke any of the 125 still-valid export licenses granted under the Tories.

These included licences for a second batch of Hawk jet trainers which had still to be delivered, as well as armoured vehicles.

The government even extended the remaining licences, after the EU imposed a temporary four-month arms embargo on Indonesia last September, prolonging their life for another four months after the embargo was lifted.

The Foreign Office says that in 1997 it was advised by lawyers that the courts could overturn any decision to revoke any of the Indonesia licences unless ministers reviewed the "overhang" of all 20,000 licences inherited from the Tories.

This was considered impractical. However, legal advice obtained by the committees suggested the government could have survived a legal challenge if it had revoked the licenses because of a change in foreign policy.