The UK has announced new funds to plug the gap left when it stopped putting money directly into the coffers of the Ethiopian Government.
Clashes between police and protesters caused UK concern
Ministers halted direct budget payments to Ethiopia in January over concerns about its commitment to human rights.
Now it is pledging to give £94m over two years to a new World Bank fund which will earmark the money for specific priorities.
The UK stresses it has continued to fund Ethiopian projects since January.
But the government and other donors have looked for alternatives to the direct budget payments.
Providing the basics
The Netherlands and the World Bank are also providing funds for the new scheme and the European Commission, Canada, Ireland, Sweden and the African Development Bank are also considering contributing.
International Development Secretary Hilary Benn said Ethiopia's people should not be made to suffer from the political problems.
He said: "The protection of basic services grant that we have developed along with the World Bank and other donors will mean that education, water, and health care, continue to be delivered at the local level.
"The measures on tight financial reporting, and strengthening local accountability, will help to ensure that this funding reaches the poorest people."
The United Nations estimated earlier this year that 1.75m Ethiopians in the south are in desperate need of food aid.
Mr Benn raised concerns about a "breach of trust" since more than 80 people were killed in opposition protests following disputed elections.
Last May's polls were the most closely contested in Ethiopian history, and resulted in the opposition winning more than 100 seats in parliament.
But the opposition believed they had been cheated of victory, and took to the streets. The clashes left many dead, and Prime Minister Meles Zanawi accused the opposition of attempting to overthrow his government.
Western governments tried to bring the parties together, but with limited success.
In November, the British ambassador to Ethiopia, Bob Dewar, put out a strong statement on behalf of the European Union and the United States.
It called for respect for human rights, an end to mass arrests, the lifting of restrictions on the opposition, and the freeing of political detainees.
Until last year's elections, Mr Meles had been praised for opening up political debate and for liberalising the economy.
He was even invited to be a member of the British prime minister's Commission for Africa.
The government has blamed its opponents for the unrest and violence.