Ministers should explore writing off a crippling £197m loan to the British Council by converting as much of it as possible into “a grant or similar”, MPs have said.

The Commons public accounts committee said the government lacked a “positive vision” for the council, whose soft power value to the UK is put at £1bn a year. The MPs called on the Foreign, Commonwealth and Development Office (FCDO) to set out what more it could do to support the council and its work.

Despite slashing a third of its headcount and selling off historical assets, the council’s future remains precarious because a £60m Covid-era FCDO loan on commercial terms has grown to £197m.

The loan was agreed by Boris Johnson’s Conservative government when the pandemic shuttered the council’s English teaching and exams business overseas.…