President Obama yesterday loosened the American embargo against Cuba by lifting curbs on family travel and money transfers, as well as allowing US telecommunications companies to operate on the island for the first time in almost half a century.

The announcement, made only days before Mr Obama travels to Trinidad for a Summit of the Americas, represents a significant crack in the hardline policy adopted by Washington since the Communist revolution in Cuba in 1959.

Although the US trade embargo has been left largely intact, the White House indicated that it would consider further measures including the introduction of direct commercial flights if Havana responded by expanding democratic rights.

“President Obama has directed that a series of steps be taken to reach out to the Cuban people to support their desire to enjoy basic human rights and to freely determine their country’s future,” Robert Gibbs, a spokesman for the White House said.

Mr Obama indicated that he was willing to engage with the Communist regime but knows this needs to be handled sensitively with Cuban exiles who wield huge influence in the key electoral state of Florida.

Perhaps significantly, he did not make the announcement. Instead Dan Restrepo, a special assistant for Latin America, told a White House briefing that “US policy towards Cuba is not frozen in time”.

The policy means that US telecommunications companies and satellite radio and television service providers can seek licences to operate in Cuba. Aides said that this will foster the growth of freedom of speech and expression in the one-party state.

“The President would like to see greater freedom for the Cuban people,” Mr Gibbs said. “There are actions that he can and has taken today to open up the flow of information to provide some important steps to help that. But he’s not the only person in this equation . . . in many ways that depends on the actions of the Cuban Government.”

The easing of restrictions on money transfers is designed to make Cubans less dependent on the Castro Government by allowing an estimated 1.5 million Americans with relatives on the island to help them out of often impoverished circumstances.

Travel restrictions imposed by the Bush Administration had limited trips by family members to two weeks every three years. Francisco Hernandez, the head of the exile group the Cuban American National Foundation, was once a staunch supporter of travel restrictions, but supported the announcement. He said that it would make Cubans more independent of the state “not only in economic terms but in terms of information, and contacts with the outside world”.

Republican Congressmen from Florida, however, condemned the decision as a serious mistake.

Times Recommends

• Tehran cannot live up to its rhetoric
• The new unicycle that will ‘change the world’
• We cannot wish away Iran’s bomb