The circular issued in light of a notification from the army headquarters on July 9, directed NGOs to spend at least 50 percent of their foreign funds on visible developments like building and upkeep of roads, schools and culverts and excavation or re-excavation of canals.

The circular triggered criticism and NGO activists even raised questions regarding the validity of the circular.

In this context, the NGO Affairs Bureau under the Chief Adviser's Office yesterday issued a new circular, signed by AKM Humayun Kabir, assistant director of the Bureau, cancelling the circular until further notice.

The Bureau directors held a meeting yesterday after an NGO delegation discussed the matter with the Director General (DG) of the Bureau M Alimushshan, sources said.

They said the delegation, led by chairman of Federation of NGOs in Bangladesh (FNB) Muhammad Ibrahim, expressed its grave concern over the issue and put forward some reasons that would lead to serious problems in implementing their ongoing and future programmes for the poor and disadvantaged.

The delegation emphasised proper monitoring of NGO programmes by the Bureau and the need for indicators of success or impact rather than distinguishing the programmes based on "visible" and "invisible". They called upon the Bureau to take measures for immediate postponement and ultimate withdrawal of the circular.

The DG assured them saying no ongoing project would be affected and the matter would be given immediate consideration, the sources said.