RUPERT CORNWELL Washington The demise of Phil Gramm's Presidential bid yesterday will have less effect on the outcome of the New Hampshire primary than in the big states of the South and West where the Texas Senator had based his hopes of seizing the Republican nomination.His departure, formally announced at a press conference in his Senate office here, reduces the nominal field for Tuesday's first primary to eight. Critics emphasise that, when Britain's aid is calculated as a proportion of gross national product, Britain is in a less impressive thirteenth place.Lady Chalker, who is generally seen as a tough fighter for aid, is now in a politically difficult position: having to defend the effect of cuts which she herself never wished to impose.Only half of British aid is now bilateral; the proportion of multilateral aid, especially via the European Union, has grown steadily in recent years.. Aid to eastern Europe, a previous recipient of aid via the Know-How Fund (providing technical and business assistance), will be reduced, as the east European countries begin to stand on their own feet.The Government regularly quotes the fact that Britain is, in absolute terms, the fifth largest donor of aid in the world. South Korea, for example, a previous recipient of aid, is now one of the world's most thriving economies - much stronger, in many respects, than Britain itself. Latin America and the Caribbean have been particularly hit by cuts.That trend is likely to continue, although Lady Chalker was careful to point out: "No specific target will be created for a set list of 20 countries The largest targets may vary from year to year...

By concentrating our efforts, we can give greater assistance and enable better progress." There was, she said "no question of abandoning countries where our support is still needed".Lady Chalker insists that there is reason for optimism, even where countries have been struck off the aid list. Others complained of cuts affecting the Caribbean countries.A fundamental expenditure review, published last year, laid out a framework for the future pattern of overseas aid. There has been a growing tendency in recent years to concentrate British aid on a smaller number of countries. Last year, for example, more than two-thirds of British aid went to just 20 countries, with less than one third going to more than 120 more. The cut has been absorbed in a smaller contribution to European aid funds. But aid agencies fear a long-term downward drift.In a recent Commons debate on the cuts, Joan Lestor, opposition spokesman on overseas development, accused the Government of "abdicating its responsibility to the world's poor", causing "lasting damage to them and to Britain's reputation". That figure is due to rise to pounds 2.2bn next year and pounds 2.3bn in 1998-99.

But he said that there were inherent dangers in the British approach "It's a mixed bag I think that's why Chalker's ambiguous. With a shrinking budget, what might have been a good idea becomes just a way of giving less."The aid budget in 1996-97 will be pounds 2.15bn, pounds 124m less than originally proposed. But bilateral aid had been "protected".Nigel Twose, director of development at ActionAid, said that British aid was "now in crisis". Without significant increases, he argued, "the quality and reach of the UK aid programme will continue to fall to such an extent that the viability of the whole aid programme is under threat".John Magrath, spokesman for Oxfam, argued that the re-focusing of Britain's aid budget was "not in itself a bad idea". STEVE CRAWSHAW Baroness Chalker provoked the wrath of aid agencies yesterday when she confirmed that Britain's aid will increasingly be concentrated on a small number of countries. The Overseas Development Minister, who was addressing the Royal Institute of International Affairs, said she was "more than disappointed" at the 5 per cent cut in the overseas development budget, imposed by the Treasury at the end of last year.

"Otherwise I will vote Communist."None of this bodes well for the President. It was in Ekaterinburg that the Bolsheviks murdered Tsar Nicholas and his family 78 years ago. The Communists are, figuratively speaking, planning the same fate for Mr Yeltsin.. The remaining workers tell a story heard across Russia: some have been waiting three months for their wages."If Yeltsin wants my vote, he will have to end the Chechen war, and pay us on time," said Vitaly Martushkin.