Pakistan warned the international community yesterday that a deal allowing India to import US atomic fuel and technology could accelerate a nuclear arms race between Delhi and Islamabad.

The warning was made in a letter addressed to more than 60 nations as the Indian Government, having survived a no-confidence vote on Tuesday, dispatched diplomats to clear the deal with international regulators.

Later, in a concession to Islamabad, the United States said that it planned to shift $230 million (£116 million) in aid to Pakistan away from counter-terrorism to upgrading its F16 fighter jets seen as crucial for maintaining military parity with India. That announcement came four days before Yousuf Raza Gilani, Pakistan’s new Prime Minister, is due to meet President Bush at the White House for talks on co-operation in combating Islamic extremists.

Pakistan is a key US ally in the War on Terror and has long complained that India’s nuclear deal, agreed in 2005, will upset the strategic balance of South Asia by endorsing it as a nuclear weapons state.

India and Pakistan both tested nuclear weapons in 1999, but cannot buy nuclear supplies from most countries because they refuse to sign the Nuclear Non-Proliferation Treaty.

The nuclear deal bypasses that by lifting a US ban on nuclear sales to India imposed after Delhi tested its first nuclear device in 1974.

India must still win approval from the International Atomic Energy Agency (IAEA), whose board meets on August 1, and the Nuclear Suppliers’ Group (NSG). Pakistan warned IAEA and NSG members in its letter that the deal would impair non-proliferation efforts and “threatens to increase the chances of a nuclear arms race in the sub-continent”.

India and Pakistan have fought three wars since independence from Britain in 1947, and though a peace process has stabilised relations since 2004, they remain deeply distrustful of each other.

Mohammad Sadiq, a spokesman for the Pakistani Foreign Ministry, confirmed the contents of the letter, which he said was distributed to IAEA members. He said: “There should be a model agreement that could be signed with any country that meets the criteria. It should not be country-specific.” The US Congress must also approve the deal and American officials have repeatedly said they could struggle to do that before President Bush steps down. Condoleezza Rice, the US Secretary of State, said yesterday that the White House would push to get it approved in time.

Congress must also approve the White House’s proposal to shift two thirds of annual US military training and equipment aid to Pakistan towards upgrading the F16s.

Congress demanded last year that military aid to Pakistan — $1 billion annually since 2002 — be spent on law enforcement or fighting terrorism.

Dana Perino, a White House spokeswoman, said that the F16s were used for counter-terrorism. Military experts said that they were rarely used against militants and designed more for a potential war with India.

India has sent its top diplomats to Germany, which holds the rotating chair of the NSG, and to Ireland, an NSG and IAEA board member and a strong proponent of the Nuclear Non-Proliferation Treaty.

The NSG — founded in 1974 — is an informal group of 45 nuclear-exporting countries committed to preventing the proliferation of nuclear weapons.

India has submitted a draft agreement to the IAEA, under which it would separate civilian and military nuclear facilities and allow agency inspections of the former.

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