The UK has suspended a $36m (£20m) aid increase to Ethiopia after 36 people died in election protests.
Protests have been banned since the elections last month
UK Development Minister Hilary Benn announced the move in Addis Ababa after meeting Prime Minister Meles Zenawi.
Mr Benn called for Red Cross access to people detained in military camps since last week's protests, and called for them to be charged or released.
UK Prime Minister Tony Blair telephoned Mr Meles on Sunday to express his concern at the shootings.
Mr Meles is a member of Mr Blair's Africa Commission, which has been pushing for more aid to Africa.
Earlier, Ethiopia said it had begun releasing many of those arrested during the protests in the capital, Addis Ababa.
An information ministry spokesman says there is no official figure for those being held, but the opposition estimate at least 3,600 have been picked up in the past two weeks.
"The government has started releasing many people who been detained and this will go on (over) the next days," Information Ministry spokesman Zemetkum Tekle told the AFP news agency.
Human Rights Watch says those being held are at risk of abuse and says Ethiopians in at least nine cities outside the capital have also been arrested.
A police spokesman said the detainees were being well-treated
On Tuesday, Ethiopian political leaders signed a declaration renewing a deal to try to end violence and launch an investigation into election complaints.
Opposition leader Hailu Shawel was also freed from house arrest.
Delayed final election results are due to be announced on 8 July after the electoral board has conducted investigations into more than 300 complaints in the 547 parliamentary constituencies.
Provisional results give the ruling party a majority of seats in the parliament, but it was comprehensively defeated in the capital.
The US on Monday condemned the use of "excessive force" in Ethiopia during the protests in Addis Ababa.