A visiting UK minister has defended his government’s support for marginalised communities in Nepal, arguing that the initiatives of the UK’s international aid agency, DFID, were aimed at helping the Nepal government implement its commitment to inclusion.

Alan Duncan, the Minister of State for International Development, on Wednesday said his government was “proud” of the work done in Nepal by DFID, but also reiterated that DFID does not fund politically active ethnic organisations.

“There have been accusations that we have been stirring ethnic conflict through our support. I have seen for myself the work that the UK has funded through DFID and I am proud of our work, which is helping to implement the Government of Nepal’s own commitment to inclusion,” he said. “I think it is untenable and unacceptable that any society can have a second class of citizen and I have no doubt that lasting peace will only be achieved when Nepal has a truly inclusive society.”

The statement comes after increasing allegations against Western donors and diplomats, including those from the UK, of stirring inter-ethnic tension through covert support for ethnic groups.

Last month, protesters from the dominant groups shouted slogans against the DFID, United Nations and other donors, accusing them of instigating marginalised groups to stand in favour of ethnicity-based federalism.

At the press meet, Duncan said that the allegations were “inaccurate.” He said the programmes that the UK are funding through the DFID are based on principles of “fairness and equality.” DFID is the largest bilateral donor to Nepal and has made a pledge of 331 million pounds (Rs 47.31 billion) from April 2011 to March 2015, gender and social inclusion being one of the key areas of its support. Last year, it discontinued funding to the Nepal Federation of Indigenous Nationalities (NEFIN), an umbrella organisation of Janajati organisations, for its involvement in general strikes. Since September 2004, DFID has provided over 2 million pounds (Rs 285.9 million) to NEFIN for its projects, including those aimed to empower Janajati women and children.

Responding to a question on the present status of DIFID’s collaboration with NEFIN, DFID Nepal Chief Dominic O’Neil said they had not resumed funding. “Since they were involved in general strikes, we were unable to fund NEFIN,” O’Neil said.

Meanwhile, the visiting minister expressed concern over the current political stalemate and urged major parties to seek a solution “sooner rather than later.” Duncan also voiced concern about the impact of political uncertainty on Nepal’s economy and urged the government to ensure accountability and oversight even in the absence of a parliament.

Duncan, who is on his third visit to Nepal, met President Ram Baran Yadav, PM Baburam Bhattarai, top leaders of major parties and Finance Minister Barsha Man Pun, among others. Wrapping up his three-day stay, he also urged party leaders to reach a compromise on bringing out a full-fledged budget.