THIS was supposed to be the scene of the world’s greatest aid effort, but endemic corruption has drained it of millions of pounds while leaving tens of thousands of tsunami victims stranded in tents.

Banda Aceh was ground zero in the tsunami of Boxing Day 2004, which claimed more than 200,000 lives across the Indian Ocean. More people died here than anywhere else.

Now two charities that raised unprecedented sums in Britain have fallen victim to rip-offs that ruined their efforts to house the survivors and have forced them to suspend key projects.

Save the Children and Oxfam were both targeted by unscrupulous building contractors who took their money, only to build structures so flimsy that a new wave would wash them away.

Save the Children may have to write off more than £400,000 worth of building contracts. Oxfam, which counts its losses in “tens of thousands of pounds”, has stopped its construction work around Banda Aceh until investigators establish the extent of the abuse.

Indonesian anti-corruption campaigners, who uncovered the Save the Children case, have also assembled a dossier of fraud and incompetence that reveals why the Jakarta government and international aid agencies have failed in their promises to the survivors of Aceh.

“We calculate that 30% to 40% of all the aid funds, Indonesian and international, have been tainted by graft,” said Akhiruddin Mahjuddin, an accountant who investigates aid spending for the Aceh Anti-Corruption Movement.

The movement is partly funded by foreign donors and its findings are regarded as credible by embassies and aid agencies.

The betrayal is all the more cruel because it has been committed, in the main, by the Acehnese themselves. Indonesia, which lost more than 131,000 people, got the most pledges of aid, totalling $6.5 billion (£3.7 billion). It has already collected $4.5 billion in funds.

The aid effort won praise for saving thousands of lives by prompt action to stop disease and to restore clean water supplies.

Yet the bereaved, the orphans and the dispossessed are eking out their 16th month in tents and shacks flung down amid palm groves and rice paddies around this sweep of ravaged coast, ringed by sharp-toothed green mountains, in the north of Sumatra.

Funds have been frozen. Projects wait on hold while worried aid administrators fly in and out of Banda Aceh clutching audit reports. Bureaucratic and political paralysis means only 10.4% of the funds allocated by the government have actually been spent, said Akhiruddin.

Of the 170,000 homes promised to the people of Aceh, only about 15,000 have been built, one year and four months after the tsunami.

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