US Secretary of State Hillary Clinton will allow US military aid to Egypt to continue despite Cairo's failure to meet pro-democracy conditions, a senior State Department official said on Thursday, a move sharply criticized on Capitol Hill.

The office of Senator Patrick Leahy, who chairs the Senate subcommittee on foreign aid, revealed Clinton's decision and made clear his deep unhappiness with it, arguing that Clinton should now limit the amount of military aid that is released.

Clinton should 'release no more taxpayer funds than is demonstrably necessary, withholding the rest in the (US) Treasury pending further progress in the transition to democracy' in Egypt, Leahy said in a statement.

Hours later, a senior State Department official confirmed Clinton would on Friday waive a requirement, recently passed by Congress and authored by Leahy, for Egypt's government to support a transition to democracy in order for US military aid to continue.

'On the basis of America's national security interests, she (Clinton) will waive legislative conditions related to Egypt's democratic transition, allowing for the continued flow of 'Foreign Military Financing' to Egypt,' the official said.

The move reflects 'our overarching goal: to maintain our strategic partnership with an Egypt made stronger and more stable by a successful transition to democracy,' the official said, asking not to be named.

Since long-time Egyptian President Hosni Mubarak was toppled by a street revolution early last year, Egypt has made marked progress toward democracy. It has held parliamentary elections and is scheduled to elect a new president in May.

However, a crackdown on pro-democracy forces - including some U.S. groups - over the last several months infuriated U.S. lawmakers and caused the Obama administration to warn Egypt that its aid might be in peril.-Reuters