The decision by the Office of the Third Sector to divert £750,000 from a fund for campaigns by small charities to the £16.7m sector Hardship Fund has caused a furore in the charity world. Sector leaders not known for their intemperate language are using terms such as "deplorable", and at grass-roots level a lively campaign by new media is being waged to get the decision reversed.
The official explanation is that the recession has made the need to bump up the Hardship Fund so urgent that it just had to be done, even though grants to 32 small charities had been approved and the cheques were about to go out.
The newly discovered urgency, according to the OTS, also justified swatting aside the provisions of the Compact, which stipulates "reasonable notice" - usually 12 weeks - of changes to funding arrangements. Meanwhile, the Government will, of course, continue to urge everyone to abide by the Compact.
If the need to increase the Hardship Fund was the only consideration, then the best you can say about this decision is that it was a serious misjudgement. Increasing the fund by a mere 4.5 per cent surely does not justify the breaching of an important agreement and all the flak and protest this is causing.
The Government is also potentially vulnerable to legal action because the letters pledging the grants had already been received and could be construed as binding contracts.
Some have speculated that there might have been other factors involved - that the real-life equivalent of Malcolm Tucker, the crazed political fixer in BBC2's The Thick of It, turned up in Smith's office last week brandishing the list of proposed recipients and demanding to know if she was intending single-handedly to lose the next election for Labour (or words to that effect.)
The list includes groups supporting Travellers, refugees, prostitutes and transgender people - how was this going to look on the front of the Daily Mail and The Sun?
This is no more than speculation, but Gordon Brown has been burnt by the right-wing press recently and his staff are no doubt scanning the ground for the next elephant trap. But whatever the full story behind the decision, the result is clear: third sector minister Angela Smith has, at a stroke, sacrificed a measure of the credibility she had gained in her early months in the job.
It seems a shame that she has done this with a decision for which the professed justification is so weak and unconvincing.