Funds provided to the peace and human rights group, AfrI (Action from Ireland), were not being used to finance a campaign against the Nice Treaty, said the British-based charitable trust which provided the money.
Mr Stephen Pittam, secretary of the Joseph Rowntree Charitable Trust, a Quaker organisation, said it had donated £25,000 to AfrI last September for "educational" activities related to the treaty but, following a change in Irish legislation, the money was re-assigned for other purposes.
The original purpose of the grant was to promote debate about the "militarisation of Irish society" in the context of the treaty. Militarisation generated poverty and injustice, so promoting awareness was in line with AfrI's charitable objectives. However, subsequent electoral legislation banned foreign donations for political purposes.
"When we and AfrI became aware of the new legislation in February and March of this year and when it became clear that maybe the terms of our grant might not be tenable, we came to a clear agreement with AfrI that our grant would not be used for the purpose of AfrI's campaign on the referendum. AfrI has assured us that none of our grant has been or will be used for the purpose of the campaign and we accept that."
Commenting, the Minister of State for European Affairs, Mr Dick Roche, said he accepted the assurances from the trust and he also accepted AfrI's word that its anti-Nice activities were funded from its own independent fundraising activities, "but it seems to me to be a very bizarre use of their funds". He said AfrI's controversial "Goodbye UN, Hello NATO" poster was "fundamentally untruthful". The Nice Treaty had "nothing whatsoever to do with NATO, the people in AfrI know that, and they are deliberately misleading the Irish people. If the Irish people are concerned about neutrality, they will vote Yes on Saturday".
Defending the poster, Mr Andy Storey of AfrI told a news conference in Dublin that there had been a "fundamental philosophical and practical shift" in Irish foreign and security policy within the EU, away from the ethos of United Nations peacekeeping to a NATO-based ethos.
Prof John Maguire said peace and neutrality campaigners were always being told to "look at the big picture" and that was what they were doing with the poster. AfrI also said its grant from the Department of Foreign Affairs was only £27,500 last year and not €100,000 as reported.