Emails released under the Freedom of Information Act show that 10 Downing Street was closely involved in the decision to transfer the £750,000 Campaigning Research Programme to the £16.7m Hardship Fund.
The decision caused a furore last November because it breached the Compact and halted grants promised to 32 small voluntary groups, including campaigners for travellers, refugees and transgendered people.
Nine days before third sector minister Angela Smith announced that she was transferring the money, an unidentified person at No 10 asked her office: "Any further news on the campaigning programme?"
The email indicates concern about a legal requirement for an equalities impact assessment. This "would signal to people the scheme is being reviewed", the email said. "What are they (government lawyers) advising, and why/when would this need to be made public?"
Equalities assessments usually involve consultation with stakeholders affected by a decision, creating the opportunity for lobbying before the decision is finalised.
An email from Smith's office the next day indicated that she wanted to proceed without an equalities assessment because it would "delay getting those funds to organisations threatened with collapse". A day later, she opted for a simpler form of assessment that was completed in a day without a consultation. Her decision was announced a week later.
Emails in the response to the FoI request, passed to Third Sector by an informant, have been heavily edited, with most names removed. Briefings to ministers have been withheld "to protect the effective conduct of public affairs".
An Office of the Third Sector spokesman said Downing Street's involvement was "further indication of how seriously the decision was considered and of how important the Government considers matters relating to the sector to be".
Whitehall observers said it would be unusual for No 10 to take an interest in decisions on such small sums unless a political risk was perceived. "At difficult times, a Prime Minister may be nervous about apparently trivial matters," said one source.
Some groups deprived of grants speculated last year that ministers might be worried the press would pillory them for giving money to unpopular social groups.