The Treasury is reviewing the status of Palestinian relief charity Interpal following reports that Israel is demanding action against the organisation for allegedly supporting terrorism.
According to The Sunday Telegraph, the Israeli ambassador will this week meet Ivan Lewis, minister at the Treasury, to discuss Interpal, which is George Galloway's chosen charity for his Celebrity Big Brother appearance.
The Treasury did not deny the story and said the situation was "under review".
The London-based charity is listed by the US government as a "specially designated global terrorist", but a Charity Commission inquiry in 2003 exonerated the charity.
Ibrahim Hewitt, chairman of Interpal, hit out at the allegations. "I have concerns that the Treasury minister will give the time of day to a foreign country over a British charity that has been cleared of any wrongdoing by the Government's own bodies," he said.
In another development, victims of a 2003 suicide bomb in Jerusalem have filed a lawsuit in the US against the Royal Bank of Scotland for providing banking services to Interpal. They allege that Interpal channelled money to the militant group Hamas, which claimed responsibility for the attack.
Hewitt said: "We have limited knowledge of the litigation, but I can say that whenever such allegations have been subjected to close scrutiny - whether by way of litigation or by the Charity Commission - Interpal has invariably been given a clean bill of heath."