Alun Michael, the Rural Affairs Minister, accused the Opposition of "descending into the gutter" in suggesting that the Bill was designed to allow the animal rights lobby to get its money back. But he came under pressure from MPs of all parties as he tried to justify the clause that will allow grants to be made to animal welfare groups.

Under the Bill hunts would have to apply to a registrar for permission to hunt. The Environment Secretary would be able to nominate organisations described in the Bill as "prescribed animal welfare bodies" to give evidence to the registrar about whether applications should be allowed.

The Bill would also give the minister the power to give funding grants to those bodies. Mr Gray said paying Government money to animal welfare bodies arguing against hunting, but not to organisations applying for permission to hunt, would make the application process totally unfair and stacked in favour of those opposed to hunting.

He claimed that the Political Animal Lobby (PAL) was a subsidiary of International Fund for Animal Welfare (IFAW) and that it made its £1 million donation to the Labour Party in 1997in return for a promise that the party would do something about hunting when elected to office. He also suggested that PAL could become a "prescribed animal welfare body" under the terms of the Bill.

Sleazy

"Not only is the minister now giving them what they have asked for, but by this extraordinarily sleazy clause in the Bill, he's undertaking to repay money to the people who have given them this money," he said.

Rob Marris, a Labour member of the committee, said it was "odd" that the Bill allowed the animal welfare groups to use taxpayers' money to fund an appeal against a decision by the registrar to allow hunting. A Tory attempt to take out the part of the Bill allowing grants was defeated.