The group received a £200,000 Community Fund grant for 2000- 2002 but was told when it reapplied last year that it was ineligible and would have to pay back the original money awarded. It believes it has been the victim of politically motivated racial discrimination.
But the Community Fund says the money was withdrawn because the group's constitution was "not properly focused" and failed to meet the necessary definition of a charitable, philanthropic or benevolent organisation.
CEMVO has now stepped in to support the organisation, which it believes does valuable work in black communities. The ethnic minority body has offered to provide the group with rent-free accommodation at its head office in Stratford, London, and pay the salary of director Gerry German under its core grants programme. More than 20 "strategic" BME organisations are supported under the scheme.
Krishna Sarda, chief executive of CEMVO, said: "Their work is crucially important for ethnic minority communities. The issue of black underachievement is well-documented, so an organisation focused on the education of black people and helping black families take advantage of due process on exclusions is important. Educational success is crucial for black families."
German accused the Community Fund of succumbing to tabloid pressure in denying new funding to the group. "We don't like the fact that the Community Fund has allowed itself to be intimidated by the media into targeting voluntary groups like ours for investigations," he said.
After the grant expired, the fund criticised the Community Empowerment Network when it included an article in a newsletter listing the countries bombed by the US since the end of the second world war.