He said the gazetting of the Open Singapore Society (OSC) as a political association "shows an ignorance, or is it an inability to understand, the objectives and aims" of the group.

Jeyaretnam is the chairman of OSC which was registered by the government last week as a political association, along with another reformist group, Think Centre.

Under the newly-approved political donations act, such groups are barred from accepting funds from sources outside Singapore.

OSC and Think Centre organised a rare demonstration in the strict city-state last year, in which people unfurled a banner, punched the air with their fists and demanded the abolition of the Internal Security Act, actions which the government considered political.

Jeyaretnam, one of only three opposition members in the 92-seat parliament, said in a statement his group's aim was to promote transparency and accountability inside and outside government.

"One would have thought that the government would welcome the objectives of the OSC and, in line with its own declared intent, help the OSC with some funding," said the 74-year-old Jeyaretnam, who is also the leader of the Workers Party.

He argued that similar organisations in other countries were allowed to receive help from foreign groups with the same objectives and aims.

"We therefore cannot see why an organisation like the OSC should not be allowed to accept help, not from governments or political parties outside Singapore, but from recognised institutions that aim to promote democracy, transparency and accountability all over the world," he said.

The government's decision "shows the confused thinking of the government and is to be regretted," he said.

The small but affluent republic maintains that local politics is a purely domestic affair and has moved to curb possible foreign involvement through funding of local political groups.

Jeyaretnam is waging an uphill battle to keep his seat in parliament after the High Court declared him bankrupt, which under Singapore law disqualifies him from holding public office.

The fate of his political career rests on a final ruling by the Appeals Court.