The government is expected to allow British Aerospace to complete the contentious sale of 16 Hawk fighter aircraft to Indonesia, following advice that there are "formidable obstacles" in the way of revoking the contract.

Ministers said yesterday that the £316m deal would not be blocked, in spite of persistent allegations that Indonesia was using jets it had acquired earlier against opponents of the regime in occupied East Timor. "There is no evidence that the aircraft is being used in East Timor," a senior government member insisted. "Our intelligence on that is very clear." A minister also said the decision on Hawk should not be seen as a sign that new applications for similar export licences would be approved. A decision to allow the sale will come as a great relief to the British arms industry, which has been concerned that the adoption of a so-called "ethical" foreign policy would

Mr Robin Cook, the foreign secretary, gave a foretaste yesterday, when he outlined 12-point plan to put human rights at the heart of Britain's foreign policy. He said the UK would "refuse to supply the equipment and weapons with which regimes deny the demands of their peoples' for human rights". The guidelines would result in changes to the present policy governing the licencing of riot control vehicles, small arms and other equipment for sale to the security forces of certain regimes".

That is expected to lead to a tightening up of the conditions imposed on the sale of equipment and armoured vehicles to Indonesia. Alvis is halfway through a £315m order to supply 100 Saracen light tanks to Indonesia, a deal criticised by human rights organisations but defended vigorously by the company.

"There is no evidence it has been used for the purpose of repression," said Mr Nick Prest, the company chairman. "It is a tracked vehicle designed for cross-country work, not urban operations." He warned that hundreds of jobs at the company's Coventry plant may be in jeopardy if the order were to be stopped, along with other possible Indonesian orders in the pipeline.

Among the most controversial is a possible upgrade of the Saracen armoured personnel carrier supplied by Alvis in the 1960s. The company admits the vehicle had been linked to the suppression of student democracy demonstrations in Ujung Pandang last April.

The Campaign Against the Arms Trade, a pressure group, welcomed Mr Cook's promise to crack down on the sale of riot control vehicles, but said it was concerned he did not refer to Labour's manifesto commitment to stop sales of weapons which might be used for 'international aggression'.

Mr Cook, speaking to an invited audience, said he realised human rights issues were complex and cut across other issues of trade and development. He was aiming to achieve 'modest advances' amd the support of UK partners, especially in Europe, would be needed. Nigeria was warned sternly that unless it radically improved its human rights record, the UK would press for its continued suspension from the Commonwealth.