NICARAGUA reasserted its claim to historical reparations totalling £13 billion from Washington on Thursday after the US approved a Bill to stifle development there.

The House foreign affairs committee approved the amended Nicaraguan Investment Conditionality Act (NICA), drafted by Republican Ileana Ros-Lehtinen and Democrat Albio Sires.

The Bill seeks to use the US veto power over international finance institutions to block development loans to Daniel Ortega’s Sandinista-led Reconciliation and National Unity government.

Ms Lehtinen claimed Mr Ortega’s election was fraudulent and demanded changes to the electoral system.

And in cold war-style rhetoric, she indicated the true motives lay beyond Nicaragua’s borders.

“Let us not forget that Ortega invited Russians into Nicaragua, has let them set up operations there to undermine US national security interests,” she said.

“It is Ortega who has been leading the charge at the Organisation of American States to undermine our efforts to hold the Venezuelan regime accountable.”

Mr Ortega’s government responded swiftly, condemning NICA as “the continuation of the historical United States policy of imperial interference in Nicaragua.”

The statement said Nicaragua had launched legal proceedings to recover the unpaid reparations awarded by the International Court of Justice at The Hague in 1986.

The compensation was for US backing of Contra death squads against the Sandinista government and direct action, including the 1983 CIA bombing of the country’s only oil pipeline.

“The Nicaraguan state will demand the right of our country to be recognised today, with resources that will be used to promote peace, democracy and development,” it said.