Anneliese Dodds, the international development minister, has quit her post over Keir Starmer’s decision to slash the international aid budget by almost half to pay for an increase in defence spending, warning it could enable Russia and China to further their global influence.

The senior Labour MP, who attended cabinet, predicted that the UK pulling back from development would bolster Moscow, which has already been aggressively increasing its presence worldwide, as well as encourage Beijing’s attempts to rewrite global rules.

Her departure, just hours after Starmer returned from a widely lauded trip to Washington for crucial talks with Donald Trump on Ukraine, came as a blow to the prime minister as concerns grew that the aid cut could damage the UK’s national security interests.

In a further setback to his commitment to maintain development spending in Gaza, Sudan and Ukraine, Dodds predicted the government would find it “impossible” with the diminished budget, which will fall by about £6bn by 2027.

However, she said she firmly believed that Starmer was right to increase defence spending, because the postwar consensus had “come crashing down” after Russia’s invasion of Ukraine.

She recognised there were “not easy paths” to boosting defence spending, saying she had been prepared for some cuts to the aid budget to help pay for the plan to increase military spending to 2.5% of GDP by 2027 – and an ambition to hit 3% in the next parliament.

But the former shadow chancellor said she believed Starmer’s 3% ambition “may only be the start”, given the tumultuous global picture, and urged the government to look at ways of raising the money other than through cutting departmental budgets, including looking again at borrowing rules and taxation.

There is understood to be a growing sense in the cabinet that the government should not let adherence to the fiscal rules scupper its wider agenda, with further painful departmental cuts on the cards in June as Rachel Reeves, the chancellor, attempts to balance the books.

Starmer replied with his own letter several hours after Dodds announced her resignation, in which he praised the departing minister but defended his decision to cut the aid budget.

Lady Chapman of Darlington has been appointed the new minister for international development, Downing Street said.

Cabinet ministers are among those who voiced concern over plans to cut aid spending by 46%, from 0.56% of gross national income (GNI) to 0.3%, after Donald Trump’s own drastic cuts to the US aid budget. In a cabinet meeting several spoke of the risk of unintended consequences.

David Lammy, the foreign secretary, said earlier this month that the US’s plan to cut aid funding could be a “big strategic mistake” that would allow China to step into the gap and extend its global influence. Starmer has been accused of pandering to the US president.

Dodds, the MP for Oxford East, said she was told about the decision by Starmer only on Monday, but delayed resigning so as not to overshadow the prime minister’s trip to Washington to make the case to Trump for security guarantees for Ukraine.

Starmer made his surprise announcement in the Commons, telling MPs that Britain would “fight for peace in Europe” with a generational increase in defence spending.

The announcement, two days before the prime minister was due to meet Trump, raised immediate concerns that he was following the US’s lead and prompted fury from aid groups, who said it could cost lives in countries that relied on UK support.

Richard Dannatt, a former head of the British army, told the Guardian the decision to cut foreign aid was a “strategic mistake” that would ultimately add to the burden on Britain’s armed forces, and risked making the UK “weaker not stronger”.

Dodds, in her letter to the prime minister, wrote: “Undoubtedly the postwar global order has come crashing down. I believe that we must increase spending on defence as a result; and know that there are no easy paths to doing so.

“I stood ready to work with you to deliver that increased spending, knowing some might well have had to come from overseas development assistance [ODA]. I also expected we would collectively discuss our fiscal rules and approach to taxation, as other nations are doing.

“Even 3% may only be the start, and it will be impossible to raise the substantial resources needed just through tactical cuts to public spending. These are unprecedented times, when strategic decisions for the sake of our country’s security cannot be ducked.”

Dodds, who was also a minister for women, was sceptical about Starmer’s promise to maintain aid funding for Gaza, Sudan and Ukraine, as well as for vaccination, climate and rules-based systems.

Officials have said that the portion of the development budget going on asylum seeker accommodation – which stands at almost a third – would eventually be freed up for aid.

But Dodds wrote: “It will be impossible to maintain these priorities given the depth of the cut; the effect will be far greater than presented, even if assumptions made about reducing asylum costs hold true.”

And she cautioned about the effect on Britain’s national security and global influence as hostile countries moved into the breach.

“The cut will also likely lead to a UK pullout from numerous African, Caribbean and western Balkan nations at a time when Russia has been aggressively increasing its global presence,” she said. “All this while China is seeking to rewrite global rules, and when the climate crisis is the biggest security threat of them all.”

She concluded: “Ultimately, these cuts will remove food and healthcare from desperate people – deeply harming the UK’s reputation. I know you have been clear that you are not ideologically opposed to international development. But the reality is that this decision is already being portrayed as following in President Trump’s slipstream of cuts to USAid.”

In reply, Starmer wrote: “Overseas development is vitally important, and I am proud of what we have done. The UK will still be providing significant humanitarian and development support, and we will continue to protect vital programmes – including in the world’s worst conflict zones of Ukraine, Gaza and Sudan.

“The decision I have taken on ODA was a difficult and painful decision and not one I take lightly. We will do everything we can to return to a world where that is not the case and to rebuild a capability on development.

“However, protecting our national security must always be the first duty of any government and I will always act in the best interests of the British people.”

Sarah Champion, the Labour chair of the Commons international development committee, tweeted: “What else could she do? She knows these cuts are unworkable. Honourable as always, she’s done right by her department & right by the PM by not resigning before DC visit. Deep shame for development where she was respected.”

The Conservative former aid secretary Andrew Mitchell said Dodds had “done the right thing” by resigning, adding: “Labour’s disgraceful and cynical actions demean the Labour party’s reputation as they balance the books on the backs of the poorest people in the world. Shame on them and kudos to a politician of decency and principle.”

Romilly Greenhill, the chief executive of Bond, the umbrella organisation for aid charities, said: “This will be a huge loss. It is clear from the devastating UK aid cuts announced this week, which must be reversed, that the government is trying to step back from its development ambitions.”