British International Development Secretary Justine Greening announced Friday the aid, due for December disbursement, was shelved because of what she said was a breach of partnership principles.
Rebels from the March 23 movement seized control of Goma, the capital of North Kivu province in eastern Democratic Republic of Congo, last week. The movement, comprised of Tutsi rebels, is suspected of committing crimes during its rebellion. It allegedly has the support of the Rwanda government, an allegation Kigali denies.
"The government has already set out its concerns over credible and compelling reports of Rwandan involvement with M23 in DRC," Greening said in a statement.
The United Nations said the humanitarian situation in eastern DRC is under control, but could grow severe should fighting continue in the region.
Greening said her government is committed to finding a lasting solution to the conflict. London said it was committing $28.8 million to help with immediate humanitarian needs there.