Tony Blair has added Serbia to the list of countries he is paid to advise, despite his role as the chief proponent of the bombing of Belgrade in 1999. Blair will counsel the Serbian prime minister, Aleksandar Vucic, who was information minister during the war and was once such an outspoken critic of the British politician that he was listed as an editor of a book titled English Gay Fart Tony Blair.

Now Vucic and Blair find themselves on the same side, under a contract sealed by Blair’s private consultancy to set up a “delivery unit” paid for, according to Serbian official sources, by the United Arab Emirates.

It is likely to infuriate not just Serbs who resent Blair’s role in the bombing campaign against the former Yugoslavia, but also opponents of his expanding business interests in the Middle East. Critics say personal concerns, including financial ties to Abu Dhabi, the UAE capital, are undermining his posting as official envoy in the Middle East for the Quartet – the UN, US, Russia and EU.

Two senior Serbian officials have said Abu Dhabi is funding Tony Blair Associates’ latest advisory role with their government.

Blair and his team have made regular visits to Belgrade in recent months, Serbian government sources say, including for a lecture by the former Downing Street head of press Alastair Campbell at the end of January.

Rival Serbian politicians say Blair is a “bizarre” choice of adviser to Vucic, given the previous fierce criticism. “How can you say such things about someone and now present him as a key factor in making our government more efficient?” asked Borko Stefanovic, leader of the largest opposition group in parliament.

The colourfully titled book, published in 2005 with Vucic listed as an editor, was written by Vojislav Seselj, a politician and suspected war criminal, when both were senior members of the Serbian Radical party.

Vucic has since tried to distance himself from his past, breaking away from the Radicals with Tomislav Nikolic, now Serbia’s president, in 2008 to form the Progressive party, which has cast itself as pro-European.

Balkan insiders say they may be counting on domestic political fallout being outweighed by the boost that Blair’s credentials could bring to their campaign for membership of the European Union, or on improvements his team could bring to their governing skills.

Blair himself may also face political fallout from the deal, because of links between Abu Dhabi, Serbia and a controversial Palestinian exile, Mohammed Dahlan, which are likely to make the deal extremely unpopular among officials in the West Bank.

An arch-rival of President Mahmoud Abbas, Dahlan has made no secret of his desire to become the next Palestinian leader. He is currently living in Abu Dhabi and serving as economic and security adviser to Crown Prince Mohammed bin Zayed Al Nahyan.

He played a pivotal role in negotiating billions of euros worth of promised investment in Serbia through a series of state-level agreements. As a result, he, six family members and six political supporters were awarded Serbian citizenship in 2013 and 2014, the Guardian and the Balkan Investigative Reporting Network (BIRN) revealed this month.

Palestinian officials have been angered by Abu Dhabi’s refusals to hand over Dahlan and its alleged bankrolling of his campaign to unseat Abbas, pouring money into refugee camps and Gaza to win over his supporters.

Nimar Hamad, Abbas’s political adviser, told BIRN from the presidential complex in Ramallah that relations with Abu Dhabi were “very poor”. He added: “It began when Prince Mohammed Bin Zayed asked not to take any measures against Mohammed Dahlan.”

Chris Doyle, director of the Council for Arab-British Understanding, said Blair needed to decide between pursuing his business interests and his post as Quartet envoy.

“There is no clear division between Blair’s diplomatic dealings and business dealings in the Middle East,” he said. “In his role as Middle East envoy, his relationship with Abbas is crucial in building the Palestinian economy and administration. [His ties] with Abu Dhabi could undermine this.”

A senior Serbian minister, who asked to remain anonymous, confirmed that Tony Blair Associates’ work, including the recent Alastair Campbell lecture, was covered by Abu Dhabi but said the exact nature of the deal was a closely guarded secret.

“No one told us any details since it’s all been agreed in very close circle,” the minister said. “There were some people giving some lectures, but to be honest I don’t see any point in the project. They haven’t told us anything we don’t already know.”

Another source from the prime minister’s office said Abu Dhabi was footing the bill for the project, but said he had no further details. “I just know that people came and they told us that it was paid by Abu Dhabi.”

Blair has already drawn fire for his business ties with Abu Dhabi, including a contract worth more than £1m a year advising the emirate’s sovereign wealth fund Mubadala.

When asked whether Blair remained an “honest broker” in the peace process, Abbas told BIRN in an exclusive interview: “Tony Blair was nominated by the Quartet committee as the Middle East envoy and we accept that as the Quartet’s decision.” But he added that he had “lost hope” in the current round of the negotiations.

He is close to the crown prince, who shares Blair’s concerns about the Muslim Brotherhood and is believed to be behind the UAE’s more forceful role in the region, including unilateral bombing raids on eastern Libyan.

A spokeswoman for Tony Blair Associates refused to confirm or deny that Abu Dhabi was funding the project, but said it would not affect Blair’s work for the Quartet in the Middle East.

“This project was directly negotiated and agreed between Serbia and TBA (Tony Blair Associates) following meetings between Tony Blair and the Serbia prime minister and was not part of any wider agreement,” she said in a statement. “The work of the delivery unit has no bearing on Tony Blair’s role in the Middle East for the Palestinian economy.”

Blair’s office told reporters last July that there was “no project in, or contract with, Serbia”, following a visit by the former prime minister to Belgrade. Blair’s spokeswoman said the Serbian deal had not been signed at the time of the denial. She refused to say when the contract was agreed.

Blair does not publish his earnings, but the Financial Times put his income for 2011 at around £20m. He is paid up to $300,000 (£195,000) a session on the lecture circuit, aides have said.

In the past he has advised countries as diverse as Rwanda, Albania, Mongolia and Kuwait. His Africa Governance Initiative has worked with the governments of Sierra Leone, Liberia, Guinea, Nigeria, Ethiopia and Senegal on a non-profit basis.

He stoked controversy by advising the autocratic ruler of Kazakhstan on how to manage the fallout from a massacre of civilians by police, and by consulting on a pipeline project initiated by Azerbaijan’s president.

This article was reported in partnership with the Balkan Investigative Reporting Network, which is partly funded by Austrian Development Cooperation (ADC). The content does not reflect the views of the ADC.