Wanted by the Hague for genocide... and by William Hague as a trading partner

The Government is courting the regime of the indicted war criminal Omar al-Bashir by declaring that relations with Sudan have entered a "new epoch". The announcement came as Britain welcomed a trade delegation from the country which has near pariah status, for the first time since warrants for President Bashir's arrest were issued by the International Criminal Court (ICC) in The Hague, over atrocities in Darfur.

Khartoum's high-level delegation met British government officials and business leaders on Wednesday to encourage investment in a country still targeted by US sanctions. It was the clearest example yet of how problematic William Hague's new foreign policy, in which commercial interests are to trump ethical concerns, will be for the Coalition to implement. The change has already seen complaints that UK diplomatic missions have been reduced to commercial agencies to drum up business.

The "Opportunities in Sudan" networking event on Wednesday brought a delegation including senior members of Mr Bashir's NCP party together with British counterparts including the UK ambassador to Sudan, Nicholas Kay. It comes after a visit by Henry Bellingham, the new minister for Africa, to Khartoum in July to boost trade and business ties. He told reporters there that Britain would be a "candid friend" to the regime in Sudan.

Representatives of major British oil, engineering, agriculture and banking companies who attended this week's event were told that Sudan was full of "untapped natural resources" and that there was "a lot of money to be made".

A brochure for the meeting and "networking reception" said Sudan is "endowed with rich natural resources, including oil, and has been emerging as a major oil producer". Those listed as attending on a document handed out at the event included mining companies, investment banks and security firms. Their representatives heard Mr Kay hail what he called "a new epoch" in relations between Britain and the regime responsible for massacres in Darfur.

The pursuit of such friendly ties leaves the Coalition partners open to accusations of hypocrisy. While in opposition the Tory party called Darfur the "world's worst humanitarian crisis" and senior officials including Mr Hague, the current Foreign Secretary, and Andrew Mitchell, now the International Development Secretary, backed the campaign to get UK companies to disinvest from Sudan.

In a foreign policy advisory in 2007 Mr Mitchell wrote of the need to "change national and international business behaviour in the face of manifest gross violations of human rights".

But last night a Foreign Office spokesman insisted that British companies were "free to pursue legitimate commercial opportunities in Sudan", adding that "increased trade would benefit" the country's people. He said that there was "no question of prioritising commercial links over the very real and pressing human rights concerns".

The Liberal Democrat MP Tim Farron, co-chairman of the party's backbench committee on international affairs, admitted that the Government's stance "was something to be concerned about". But he defended the argument for trade. "You sometimes build relationships rather than chuck bricks," he said. "It might not be the most pleasant prospect for people who feel strongly about these issues, but it's about what you can do – how you can make a difference. Do we want to be purist and make no difference, or be pragmatic and actually improve human rights?"

The rapprochement with Mr Bashir comes at a time of mounting international concern over the future of Africa's largest and possibly most complex country. Barack Obama led a meeting of world leaders at the UN in New York last week to address fears that a vital referendum which could see the South vote to split Sudan in half is threatened by delays. The vote which is due in January was the keystone of a 2005 peace agreement that ended a 20-year civil war between the Muslim-dominated North and the predominantly Christian South that cost 2 million lives. Any collapse in that deal could prompt a return to war.

Human rights groups are also warning that deeply flawed elections earlier this year that returned Mr Bashir to the presidency have been followed by a fresh bout of political repression.

These concerns were ignored, according to participants at this week's meeting organised by the UK Trade and Investment Authority. An accompanying investors' guide to Sudan devoted only three lines to the myriad security concerns and insisted that the country had enjoyed 20 years of political stability.

The British Government's new commercial priorities have outraged human rights groups. The ongoing crisis in Darfur which has killed hundreds of thousands of people and displaced millions more as well as the North-South arms race ahead of a vote on secession are summed up in the investment booklet as small "exceptions" in "peripheral regions".

In sharp contrast to the UK approach, the US has a powerful package of economic sanctions that it deploys against the Sudanese regime, which works in concert with an international arms embargo. But that policy has also resulted in China's emergence over the past decade as the Sudanese government's main backer to wield outsized influence in Khartoum. China has been heavily criticised at UN Security Council meetings for protecting the same regime that the British Government is now prepared to do business with.

The devastation in western Sudan prompted the ICC to add the charge of genocide to counts of war crimes and crimes against humanity brought against Mr Bashir in July. The oil industry has provided a lifeline for a regime in Khartoum that became an international pariah for its actions in the western region of Darfur. Oil accounts for half of all Sudan government revenues and more than 90 per cent of export earnings. While this has meant fabulous riches for the political elite, such as Mr Bashir's NCP party, and development in the capital, the total lack of investment in the regions has been one of the key sources of conflict in Sudan's bloody history since independence.

The Chinese energy giant PetroChina and several Swedish firms are currently under criminal investigation over alleged involvement in human rights abuses. "Entering Sudan's oil business comes with a host of risks attached," warned Gavin Hayman, from resources watchdog Global Witness. "For the average citizen in Sudan oil has been a source of long and bloody conflict rather than a source of development. Companies have a duty not to just pour money into an opaque government. Oil will either be the key to peace in Sudan or the cause of another war."