Britain's Department for International Development says it will give nearly 800,000 dollars to Burmese groups working with displaced people on the edges of conflict areas.
The department says it will also allow organizations it funds in Thailand to use money across the border.
The increase in aid comes just months after aid groups in Britain criticized the DFID for not doing enough to help victims of repression in Burma.
Human rights groups say Burmese government forces have been emptying villages in Karen state as part of an offensive against minority Karen rebels.
US-based Human Rights Watch says that since 1996, more than one million people in Burma have been displaced, and more than three thousand villages have been destroyed or abandoned in the east of the country.
Last year, Britain earmarked 385,000 dollars to help those who have been forced from their homes and villages in Burma.