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Contracts and relationships with the statutory sector could destroy voluntary groups, a public policy think-tank chief has warned.

Robert Whelan, deputy director of Civitas, said: "Voluntary organisations should take no money from government and have as little to do with politicians as possible. Voluntary organisations are a vital part of civil society - through them we learn how we can be the best kind of people we can be."

He told a seminar organised by the Institute of Economic Affairs that government wanted voluntary groups to do its work "on the cheap".