Corbyn: grandfather lash row has shamed Cameron into reversing Saudi Arabia prison plans

Ministers had been under intense pressure to scrap the proposal for a £5.9 million training arrangement in the light of several controversial cases in the Gulf state.

Downing Street announced that the Government had withdrawn its bid and, in a separate development, said the Prime Minister was personally intervening in the "extremely concerning" case of Karl Andree, who has been told he could face a public flogging - which his family fear could kill him - after being caught with home-made wine.

But Mr Corbyn, who had raised the issue at his party’s conference in Brighton earlier this month, said: "David Cameron has been shamed into a U-turn on this terrible contract, but why on earth was it set up in the first place?

"We should be sending a strong message to repressive regimes that the UK is a beacon for human rights and that this contract bid is unacceptable in the 21st century, and would damage Britain's standing in the world."

Earlier, the Prime Minister's official spokeswoman told reporters: "This bid to provide additional training to Saudi Arabia has been reviewed, and the Government has decided it won't be proceeding with the bid."

She added that the decision was based on an examination of the "priorities" for the Ministry of Justice and a decision to "focus on some of the domestic priorities we want to do in terms of reforms here".

"Having looked at it further again, we have established that we can withdraw at this stage, there will be no financial penalty and consequently that decision has been taken."

Number 10 stressed that the intervention in the case of Mr Andree was a separate issue, based on concerns in his particular case.

The spokeswoman said: "This is an extremely concerning case. We have been providing consular assistance to Mr Andree and to his family since he was first arrested and we have raised the case repeatedly in recent weeks.

"Given the ongoing concerns and the fact we would like to see more progress, the PM is writing today to the Saudis to further raise the case on the back of the action that has already been taken by the Foreign Office."

In the letter, to a "senior" figure in the Saudi government, "the Prime Minister will outline some of the concerns that we have around this case and this individual".

Reacting to Downing Street's intervention, Mr Andree's son Simon Andree said: "I'm pleased. It has taken an awful long time. I need to speak with my family."

He added: "I just hope that the breakdown of this deal won't affect him. It was never my intention. I hope it won't impact upon him. This case was always about my father's health."

Mr Andree, a grandfather of seven who has battled cancer and suffers from asthma, has lived in the Middle East for the last 25 years, having worked in the oil industry.

He was described as an "all-round lovely person" and a "very good man" by his family.

Mr Andree was arrested in Jeddah in August last year after bottles of home-made wine were discovered by police.

He was sentenced to 12 months in prison and flogging for breaching the country's strict anti-alcohol laws. He has served his time in jail but is still locked up as Saudi officials wait to carry out the lashings, according to his son.

The family are also urging that Mr Andree be released on compassionate grounds because his wife Verity is dying of Alzheimer's and is in Britain receiving care.

Asked whether "political considerations" were getting in the way of efforts in his father's case, Simon Andree told the Press Association: "I think my father is at the bottom of the list. It's very unfair.

"I feel that all the business dealings with Saudi Arabia and the UK are probably taking priority over it.

"I'm asking David Cameron to look at his case, look at his health and help us bring him home.

"He's a British citizen - we have British citizens locked up around the world and it is the responsibility of the British Government to help him."

The withdrawal of the prison contract bid follows reports of a Cabinet rift on the issue, with Justice Secretary Michael Gove said to have angered Foreign Secretary Philip Hammond by seeking to pull the plug.

Mr Gove was reported to have secured the support of Business Secretary Sajid Javid for abandoning the proposed deal to sell expertise to the Saudi penal system - but was overruled by Downing Street.

The Justice Secretary has closed down the controversial departmental commercial body which sold prison expertise to countries with dismal human rights records.

Just Solutions international (JSi) was established under his predecessor Chris Grayling in 2013.

But the MoJ announced that withdrawing JSi's controversial bid for the Saudi Arabia work "would be detrimental to HMG's (the Government's) wider interests".

The Government has faced sharp criticism from human rights groups for JSi work carried out in countries with poor human rights records such as China, Pakistan, Libya and Nigeria.

JSi, which is staffed by British civil servants, has also undertaken work in Oman, Bermuda, the Cayman Islands, Kosovo, Turkey, Macedonia and the Seychelles.

The MoJ has previously insisted that JSi's work was focused on trying to improve human rights standards in the countries' jails through training and prison design, and complied with British human rights standards.