The Department for International Development (DfID) is to merge with the Foreign and Commonwealth Office (FCO), the Prime Minister confirmed today, in a controversial shake-up that could have major ramifications for overseas support for climate-hit regions and the UK's diplomatic efforts ahead of the crucial COP26 Summit.

Boris Johnson this afternoon announced the creation of a new "Foreign Commonwealth and Development Office", which he said would "unite our aid and our diplomacy and bring them together in our international effort".

At present DfID is responsible for the UK's £15bn annual foreign aid budget, which adheres to the UK's long-standing commitment to spend 0.7 per cent of GDP on overseas aid. As such the Department plays a significant role in supporting climate adaptation and mitigation projects in vulnerable countries, while also driving sustainable development and showcasing the UK's clean technology expertise.

Announcing the merger in Parliament this afternoon, Johnson did not directly answer questions from MPs about whether DfID's budget and staff would be protected in the merger, nor what impact the move could have on the UK's aspirations to remain a 'world leader' on climate action.

However, he indicated a major shake-up of how aid budgets are managed is underway, suggesting that in future British Ambassadors will lead on all UK work in their host countries, including diplomacy, aid, and trade.

Johnson claimed that at present the UK's international efforts were "less than the sum of our parts", criticising the "dividing line" between UK foreign diplomacy and aid, and alleging that "for too long [aid budgets have] been treated as some sort of giant cash point in the sky".

Aid and foreign policy, he claimed, both serve British interests and are "one and the same endeavour", adding that "we have a responsibility to ask whether our current arrangements dating back to 1997 still serve our interests".

He added that enhancing integration between diplomatic goals and development spend could boost the UK's climate efforts.

"The overriding aim is to bring this country's strengths and expertise to bear on the world's biggest problems, seizing the opportunities of Britain's presidency of the G7 next year, and the UN climate change conference, COP26, which we will host on Glasgow," Johnson said.

The merger, which has long been favoured by some leading Conservative Party thinkers, follows Johnson's decision to appoint ministers working across both departments in February's Cabinet reshuffle.

Lord Goldsmith, for example, currently serves as Minister of State for the Pacific, International Environment, Climate and Forests, and Animal Welfare across both DfID and the Foreign Office, while also retaining his post as a Defra Minister.

Proponents of the merger argue it will create a more efficient department and ensure UK aid spending is targeted more effectively, but many green campaigners are concerned it could make aid programmes a bargaining chip in international negotiations, which could serve to de-prioritise overseas investment in clean tech and climate mitigation and adaptation projects. There are also concerns that the new approach will see aid targeted at countries where the UK has a strategic interest, rather than where it can have the biggest positive impact.

And, with the UK facing a major challenge to encourage nations to step up their emissions reduction commitments ahead of COP26 in Glasgow in November 2021, observers fear the machinery of government changes could also impact on diplomatic preparations for the critical global summit.

Responding to the PM's statement today, Labour leader Kier Starmer offered a withering assessment of the merger, which he slammed as "the tactics of pure distraction" amid a global pandemic and rising unemployment.

Starmer said DfID was a "huge soft power asset" for Britain and pressed the PM to say whether the Department's budget would be ringfenced, whether staffing numbers would remain the same, and what the estimated cost would be of the merger.

The Labour leader said the UK should be "leading the global fight against poverty, climate change and gender equality", which he argued would not be achieved by "abolishing one of the best performing and achieving Departments".

Former Lib Dem International Development Secretary during the Coalition Government, Douglas Alexander, also slammed the move as "an act of national self-harm that would hurt both the UK's global standing and our efforts to assist the world's poorest people amidst a global pandemic".

And former Conservative Prime Minister David Cameron also offered a damning assessment, writing on Twitter that "more could and should be done to co-ordinate aid and foreign policy, including through the National Security Council, but the end of @DFID_UK will mean less expertise, less voice for development at the top table and ultimately less respect for the UK overseas".