A Spanish government delegation pledged the donation in meetings on Monday with Chadian authorities and with the United Nations children's agency UNICEF which will channel the funds into education, nutrition and child protection projects.

In all, 50,000 children in eastern and southern Chad are expected to benefit from Madrid's donation, including the 103 infants aged 1 to 10 years who were at the centre of the high-profile child abduction case late last year.

Seven Spanish nationals were initially detained in the case, which raised questions about overseas adoption initiatives and ended with six French aid workers being convicted in December for illegally trying to fly the children out of Chad to France.

The French said they believed they were helping war orphans from Sudan's war-torn Darfur region, but U.N. officials said most were not orphans and came from Chadian border villages.

The Spaniards -- the crew of the plane chartered for the foiled flight -- were freed. But the six members of the French Zoe's Ark humanitarian group were sentenced to eight years hard labour by a Chad court which said they used deception to take the infants. They were sent to France to serve sentences there.

"Sometimes, good comes out of bad," said Adam Mahamat, the director for Europe in Chad's Foreign Ministry.

"In the course of the Zoe's Ark affair, in which some Spanish nationals were involved, we were contacted by the Spanish government which wanted to set up bilateral cooperation channels," he added.

The UNICEF representative for Chad, Mariam Ndiaye, said the Spanish donation would be used to help all children in the target areas, whether they were Sudanese refugees fleeing violence in neighbouring Darfur or displaced Chadians.

"Obviously, refugee and displaced children are among the most vulnerable," Ndiaye said. She added that up to 90,000 more people, principally the families of the 50,000 children targeted, would also benefit from the Spanish donation.

Humanitarian workers had feared that the negative publicity surrounding the Zoe's Ark case would hamper their operations in east Chad, where more than 400,000 Sudanese and Chadians shelter in U.N. camps after fleeing political and ethnic violence.

But UNICEF's Ndiaye said the affair had focused world attention, hitherto largely fixed on Darfur, on the plight of thousands of vulnerable infants over the border in Chad.

"So the problem turned into an opportunity to help children in eastern Chad," she said.