The lobbying act has created the impression that some Conservative party politicians do not want charities to campaign and "possibly may not actually like charities", according to the local infrastructure body Navca.
In its response to a consultation being carried out by Conservative peer Lord Hodgson of Astley Abbotts for his review of the act’s regulations relating to third-party campaigning, Navca says the government has failed to explain or demonstrate the threat to democracy the legislation is intended to deal with.
Commenting on the view that the act had had a "chilling effect" on charities’ campaigning activities, Navca responded that this would be going too far.
"However, it has created an impression that some Conservative party politicians do not want charities to campaign and possibly may not actually like charities," it says. "This act has been introduced at a time charities feel they are in an unprecedented period of media attacks, often led by the right-wing press.
"This is a concern as communities benefit from charities and government at all levels working together rather than in an atmosphere of distrust and suspicion. It seems a world away from where we were in 2010 when the government clearly made working with charities a priority."
The legislation has created an impression that politicians feel that campaigning is the preserve of political parties, Navca’s response continues.
"Charities have a right to campaign and often this can be the most effective way of making a difference to a charity’s beneficiaries. Government should encourage rather than seek to reduce charities’ involvement in campaigning," it goes on to say.
Lord Hodgson opened the consultation, which had 33 questions, in June; it closed last week.
Barney Mynott, head of public affairs at Navca, said the act was "a dog’s dinner".
"Its origins were in the lobbying scandals involving MPs but it was used to attack charity campaigning," he said. "Although the government is trying to improve it – and Lord Hodgson is a good person to try to do this – it would be better just scrapping it entirely."
Asheem Singh, director of public policy at the charity leaders' body Acevo, said his organisation was work working with the Harries Commission on Civil Society and Democratic Engagement, which is made up of more than 100 charities and NGOs, to collate examples of the lobbying act’s "chilling effect on the sector and its activity".
He said: "It is clear that the act has been bad for society and bad for our democracy and is unsustainable in its current form."
He said a forthcoming report from the Harries Commission, which is expected to be released next month, would contain robust a defence of the sector’s right and duty to campaign on behalf of its beneficiaries, and would be the subject of discussions with Hodgson and his team.