The government is facing a backlash from charities after the government claimed multimillionaires were dodging tax by donating to causes.
Charities, who are campaigning against plans to cap tax reliefs on donations to charity from April 2013, say millions of pounds of donations could be at risk following the crackdown.
The prime minister's official spokesperson defended George Osborne's claim that the cap would prevent "abuse" of the system, saying on Tuesday that "in certain instances" people "may be giving to charities" who don't "do a great deal of charitable work" to avoid tax.
David Cameron stood by the comments saying on Wednesday, saying during a visit to Indonesia: "There is a problem with some people using a range of tax allowances to reduce their effective tax rate," he said.
"There's no doubt that some abuse is taking place. We've been informed of that by the Inland Revenue."
More than 800 charities have signed up to the Give It Back George campaign, which is being run by the National Council for Voluntary Organisations (NCVO), to fight the cap.
The NCVO's Deputy Chief Executive Ben Kernighan said Number 10's comments represented a "remarkable slur" and were "extraordinarily unhelpful."
"I think that on the one hand you have got a government which has been talking about the importance of charities and trying to promote philanthropy and now we get this remarkable new line of attack.
"You've got a Charity Commission whose purpose it is to regulate charities. If the government doesn't think that charities are being regulated well, they should do something about it, rather than trying to cut off an enormous amount of funds. They are presenting no evidence of this being a significant problem and they are also using an enormous sledge hammer to crack what appears to be a bit of a small nut," he told The Huffington Post UK.
John Low, Chief Executive of the Charities Aid Foundation said Chancellor George Osborne was "wrong to equate tax relief on major donations to charity with tax avoidance," adding that a "blanket cap" would cost "millions of pounds."
“We should recognise and celebrate today’s great philanthropists, not brand them as wealthy tax dodgers," he said.
Regulator the Charity Commission said they were "not aware" of the specific details behind Number 10's comments
In a statement they said: "We are not aware of the detail of these specific concerns, however we consider concerns about charities raised with us on a case by case basis and in line with our normal regulatory approach".
Tory MPs also tweeted their concern, with backbencher Zac Goldsmith and parliamentary private secretary to Northern Ireland secretary Owen Paterson Conor Burns saying:
According to the NCVO 7% of people provide 45% of funding for charities.
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