Antony Barnett – The British Government faces fresh embarrassment over its controversial policy of selling arms to Indonesia as the first evidence emerged of the Indonesian military using UK-made tanks to crush a rebellion in its Aceh province.

Friday's edition of Indonesian daily Suara Pembaruan published a photo of two Scorpion tanks, made by the Coventry firm Alvis, in offensive operations in Pidie sub-district, north Aceh, while an Indonesian military commander told The Observer he knew the Foreign Office in London would "have a fit".

The spectre of British-made tanks involved in the conflict is acutely embarrassing for the Blair Government, which came under pressure to block the sale after it was elected in 1997. Yesterday a Foreign Office spokesman said an investigation would be launched. Despite pledging to introduce an ethical foreign policy, then Foreign Secretary Robin Cook allowed the export of these tanks because he claimed they had received assurances the equipment would not not be used for internal repression. The decision by the Indonesian military to use them in this bloody civil conflict is a clear violation of those promises, and human rights groups are demanding the British Government intervenes.

Indonesian generals have repeatedly said they do not intend to abide by non-binding assurances made to the British Government about the use of weapons. Earlier this month Colonel Ditya Sudarsono insisted they would not be used to violate civilians' human rights but would be used offensively. "They will become a key part of our campaign to finish off the separatists," he said. "They will be used for restoring peace to the province." Ditya admitted Britain would be unhappy at the Scorpions' deployment. "Maybe later the British Foreign Minister will have a fit," he said.