The Charity Commission has said it will review its policy on the naming of non-charitable campaigning groups connected to charities after receiving a complaint from the fracking company Cuadrilla.
Charities are currently able to set up non-charitable limited companies to carry out campaigning that could be deemed political in areas related to their causes.
Cuadrilla made a complaint to the commission after leaflets campaigning against the controversial hydraulic fracturing technique for extracting gas were distributed by Friends of the Earth Ltd, a non-charitable company that established the environmental charity the Friends of the Earth Trust.
Although the commission established that the campaigning had been carried out by the company, not the charity, and did not fall under the commission’s remit, the commission said it would be re-examining the policy.
A spokesman for the commission said: "We are aware of a number of examples where a charity has a similar name to a non-charitable body. When this happens there can be confusion for the public between the two bodies.
"The commission is concerned that in some cases it is insufficiently clear to the public whether the organisation they have chosen to support is the charity or non-charitable body with the same name. Such confusion might damage the reputation of the charity and public trust and confidence in charities.
"We therefore intend to review whether there is anything that can be done to avoid this difficulty in the future."
In 2014, Lord Lawson’s charity the Global Warming Policy Foundation set up a non-charitable campaign group, the Global Warming Policy Forum.
The move was made at the Charity Commission’s suggestion, after it had receiving complaints that the charity had carried out campaigns that did not fit within its charitable aims.
Francis Egan, chief executive of Cuadrilla, claimed in November that the leaflets handed out by Friends of the Earth Ltd were inaccurate. He accused the trust of "choosing to distance itself from a misleading and fear-inducing fundraising leaflet by hiding behind its non-charitable associate" and of using the non-charitable company to "abuse the fundraising process".
Friends of the Earth said the charity no longer campaigned on fracking, having decided the issue was too politically sensitive, and had handed the campaign over to the company, which was established in the 1970s.
But Egan described the arrangement as "a sham", saying: "We urge the Charity Commission to investigate the fiction that this charity is no longer involved in campaigning against fracking."
A spokeswoman for the charity said: "Friends of the Earth Ltd and the Friends of the Earth Trust are separate legal entities with different boards and separate bank accounts.
"Each board makes its own decisions about what to work on, though the two work closely together, sharing infrastructure, staff and a brand, because this is the most cost-effective way to achieve their separate but similar aims.
"The charity decided to cease all involvement in fracking campaigning from June 2015 because, although it contributes towards achieving the charitable objectives, it was considered to have become high-risk for the charity due to the political sensitivity of the issue. However, Friends of the Earth Ltd continues the fight against fracking."
She said any money raised through the leaflets had gone to the company, not the charity, and Cuadrilla’s accusations were designed to stifle debate and distract from the real issue.