The community fund, which distributes lottery money to charities and good causes, said today that it will pay out �340,000 to an anti-deportation group - unless the Home Office can show good reason why it should not do so.

The row blew up over the weekend, when it was revealed that the NCADC - the National Coalition of Anti-Deportation Campaigns - was due to receive its second large lottery grant, despite the fact that it is committed to stopping the removal of failed asylum-seekers.

The Community Fund is an independent body under the general supervision of the Department of Culture, Media and Sport, and weekend newspaper reports suggested a behind-the-scenes row between the DCMS and the Home Office.

Despite that, the two Departments issued a joint statement welcoming a promised review of the NCADC's aims and objectives: the statement also suggested that checks were needed into whether it was operating within the law.

The Community Fund's Policy Director Gerald Oppenheim confirmed to The World at One that it was one of the Fund's own press releases that drew attention to the NCADC grant.

We need to be sure that this organisation is not giving advice against the law

Tessa Jowell Secretary of State for Culture

As things stand, the final decision will be left to the Community Fund, working on any new information they're given by the Home Office. We know why the Home Office is dubious, because of the joint statement agreed between David Blunkett, and the Culture Secretary, Tessa Jowell.

It reads: "We welcome the decision of the Community Fund to look again at this grant. We need to be sure the activities of this organisation are conducted within the law. This is an essential requirement for the public confidence on which the lottery depends. Funding organisations to campaign is clearly acceptable. However, organisations engaging in political activity are not eligible for lottery funding. This principle must be upheld."

But the Culture Secretary Tessa Jowell told us that that neither David Blunkett or her department could stop this grant, or interfere with the decision of the Community Fund without "changing the law" However Mrs Jowell did confirm that both she and the Home Secretary had both expressed some concern about the application because of the political nature of the charity.