Malawi and its former colonial power Britain formally re-established full diplomatic relations on Wednesday when London's envoy Michael Nevin presented his credentials to President Joyce Banda.

High Commissioner Nevin told reporters his presence “symbolised a new era and signified the re-establishment of the full bilateral relationship between the two countries” after a diplomatic spat that saw tit-for-tat expulsions.

“My visit symbolises Britain's return and the strong people to people links that binds us together,” he added.

Britain's previous envoy Fergus Cochrane-Dyet was booted from Malawi last year when a leaked diplomatic cable showed he had accused the late president Bingu wa Mutharika of “becoming ever more autocratic and intolerant of criticism”.

London responded in kind.

Malawi gained its independence from Britain in 1964 and London remains the biggest bilateral donor to the nation, where half the 14 million citizens live below the poverty line and on less than a dollar a day.

International worries about Mutharika's governance led donors, including Britain, to cut off aid. He died in office in April.

Malawi depends on donor support for up to 40 percent of its development budget and salaries for 169 000 civil servants.