Jakarta – The United States yesterday announced US$468 million (S$802 million) in aid to Indonesia, earmarking part of it for improving Islamic schools, which have been blamed for encouraging fundamentalism.

A US statement said it was the largest development assistance programme ever agreed with Indonesia, the world's most populous Muslim nation and an ally in Washington's war on terror.

Over five years, the US will provide US$157 million to improve the quality of education, US$236 million for other basic human services and US$75 million in food assistance.

Referring to the targets of the school aid, US Ambassador Ralph Boyce said: "Pesantrens, madrasahs, public schools, private schools. It has been drafted with the advice and input of the Ministry of Education and Religious Affairs." A pesantren is an Indonesian-style Islamic boarding school.

Mr Boyce said: "Indonesian children will have an improved chance of emerging as greater contributors to Indonesian economic and social growth as healthy, productive and educated citizens."

Militants involved in attacks in recent years, including the 2002 Bali bombings, were graduates of hardline Islamic schools.