The paper, Who cares?, written by writer and journalist Nick Seddon, claims charities that derive more than 70 per cent of their income from the state have reached a level of dependency that makes them part of the state, rather than civil society. Those organisations should lose their charitable status in order to preserve the integrity of the third sector, Seddon argues.

Under this system, some of the UK’s biggest charitable brands, including NCH, Leonard Cheshire and Barnardo’s, would find themselves stripped of their status.

The report proposes three categories of third sector organisation. Charities receiving less than 30 per cent of their income from the government would still benefit from full charitable status, but those receiving between 30 and 70 per cent should be termed ‘state-funded charities’ and receive only modest benefits.

Those continuing to receive more than 70 per cent of their income from the government would then be forced to make a choice between reducing their dependence on statutory funding or losing their charitable status.

Seddon also claims that government-funded charities are carrying out research that is then used in support of government policy, for example the report Families and the state produced by the National Family and Parenting Institute and NCH; recipients of 97 per cent and 88 per cent of their income from the government respectively.

“Nick Seddon argues for the importance of keeping the charitable and voluntary sector part of civil society,” a statement from the think tank said. “As the government funds charities, and even turns statutory bodies into charities, the lines are becoming blurred. These charities come to resemble more and more the statutory departments on which they depend for money, whilst also competing with genuinely independent charities for donations, and creating confusion about what a charity is.”