Human rights groups accused a parliamentary committee of a whitewash yesterday after it failed to take the government to task over double standards in its dealings with the Saudi and Bahraini regimes.

In a report yesterday the foreign affairs committee conceded that the government has an apparent credibility problem over the way it balances human rights issues with its business and political dealings in Saudi Arabia.

And charges of hypocrisy over its dealings with the regime could no longer be ignored, it said.

The committee urged ministers to consider "confidence-building measures," such as supporting access to Saudi Arabia for NGOs and journalists.

But it also warned that "constant and severe" public criticism could lead to the Saudis severing links and potentially worsen the situation.

The wider region remained critical to British interests, it added, and while many states are among the "least democratic in the world" with generally poor human rights records they are also wealthy, powerful and "vitally important."

Saudi was described as "an important if controversial buyer" for the British defence industry but the committee argued there was "no conclusive proof that Saudi Arabia has misused the equipment sold by the UK."

Regarding Bahrain the committee backed the government's strategy of engagement, but warned that support should not be unconditional if pledged reforms were slow to occur.

Committee chairman Richard Ottaway said Britain's relations with both regimes required "a sensitive and nuanced approach, taking into account our long history of relations and shared interests, as well as the differences between our societies.

"The government is correct to focus on what is constructive and achievable by working with the leadership in both states, but it cannot simply ignore the charges of hypocrisy and criticism levelled against the UK," he said.

But Amnesty International UK campaigns director Tim Hancock said: "Both Saudi Arabia and Bahrain treat basic human rights with near contempt and we welcomed this investigation when it was first announced.

"However it's really disappointing to see the committee pulling its punches like this."

He said that while the committee recognised that Bahrain's promised reforms have not materialised, "it seems more interested in preserving the status quo than in seeing the government championing human rights improvements in the region."

Campaign Against Arms Trade (CAAT) went even further, branding the report a whitewash.

It criticised the the appointment of former British ambassador to Saudi Arabia Sir William Patey as a specialist adviser to the committee.

CAAT also expressed serious reservations regarding “an informal meeting” which it alleged took place between MPs and representatives from BAE Systems.

CAAT parliamentary co-ordinator Ann Feltham said: “Unfortunately it looks as though arms company and establishment interests reached into the heart of this inquiry.

“The foreign affairs committee is giving cover to the UK government as it continues the policy of pandering to despicable regimes in its desire to drum up sales for BAE Systems.”