By Astrid Zweynert

LONDON (Thomson Reuters Foundation) - Britain must stick to its international aid spending target despite criticism about transparency and efficiency to ensure it can lift millions of people out of poverty, a group of 20 British aid agencies and advocacy groups said on Sunday.

In a letter to the Observer newspaper, charities such as Oxfam, Save The Children and International Rescue Committee said British aid improves and saves millions of lives every day.

The issue will be debated by lawmakers on Monday, prompted by a petition to scrap the government's pledge to spend 0.7 per cent of national income, or 12 billion pounds ($17.1 billion), a year on aid and to protect the budget from cuts.

Central to the petition, launched by the Mail on Sunday newspaper in March and signed by 230,000 people so far, is the spending by private contractors hired by Department for International Development (DFID) to deliver aid.

An investigation by the Mail found some of these companies had made huge profits and awarded its senior executive big pay increases since they had been contracted to deliver U.K. aid.

Critics also argue that by directing aid through Western-based contractors instead of local and regional counterparts Britain is missing the chance to encourage local ownership of aid.

"We support the demand that all involved in the delivery of aid should act with the utmost accountability and deliver value for money," the letter said.

"But ending our international commitment to spend just seven pence of every 10 pounds of our national wealth on aid sends all the wrong signals...," it continued.

DFID has defended its use of private contractors, saying it was right to use specialist expertise to achieve its aim to tackle poverty and protect Britain's national interest in some of the world's most fragile and dangerous places.

Since 2012 the government has saved 500 million pounds after tightening its approach to using contractors, DFID said on its website.

Highlighting the achievements of U.K. aid, the letter said in the past five years it had helped more than 13 million people with emergency food aid and given nearly 63 million access to water, sanitation and hygiene services, the aid agencies said.

Moreover, British investment in immunization and education saves a child's life every two minutes and ensures 11 million children go to school, the letter said.

James Whiting, chief executive of Malaria No More UK, one of the signatories of the letter, said Britain's aid spending commitment was crucial to help eradicate diseases like malaria.

"When government gets involved we can end disease forever. We're talking scale which can only be achieved with the help and expertise of governments," Whiting told the Thomson Reuters Foundation, adding Britain is among the world's top three spenders on malaria.

The other signatories are ActionAid UK, the Bond Network, CAFOD, CARE International UK, Christian Aid, Concern Worldwide UK, Global Citizen, Islamic Relief, Marie Stopes International, Mercy Corps Europe, the ONE Campaign, Progressio, Restless Development, VSO International, UNICEF UK and Water Aid.

($1 = 0.7013 pounds)

(Reporting by Astrid Zweynert; Editing by Belinda Goldsmith; Please credit the Thomson Reuters Foundation, the charitable arm of Thomson Reuters, which covers humanitarian news, women's rights, trafficking, property rights and climate change. Visit news.trust.org to see more stories)