Britain will now be able to spend official development aid on hurricane hit-islands after changes to international rules agreed in Paris.
During this year's hurricane season the UK government was not able to release funds to its Caribbean territories as they were deemed too rich.
But the body that sets rules on aid said money could be spent when catastrophic humanitarian crises hit.
The international development secretary described it as a "real step forward".
The Organisation for Economic Cooperation and Development (OECD) ruled on Tuesday that aid could be used for short-term help for middle-income countries.
Under current OECD rules, some of the small island nations in the Caribbean that were hit by Hurricane Irma last month were unable to receive official development assistance - known as ODA - because their national incomes are too high.
The OECD's development assistance committee (DAC) rejected a UK plan for small island states to be allowed to waive the rules in emergency.
But instead the 30 member countries backed a different plan to use official aid in temporary emergencies but on the crucial condition that no ODA is diverted from existing recipients in the process.
The DAC also agreed to establish a new mechanism for middle-income countries to be reinstated on to the list of ODA-eligible recipients if they suffer a long-term economic decline.
Last month the British overseas territories of Anguilla, Turks and Caicos and the British Virgin Islands were badly damaged by Hurricane Irma. But there was controversy after it was revealed that Britain's £13bn aid budget could not be used to help repair the islands.
All three had gross national incomes higher than the benchmark set for countries to be eligible for ODA.
International Development Secretary Priti Patel said: "[The] agreement is a real step forward, and we welcome the clear support from the head of the OECD for our efforts."
This article has been republished from www.bbc.com