£400,000 Lotto cash to help asylum seekers claim their benefits

The grant is designed to ease the "extreme problems" faced by refugees who win the right to stay here.

However, it has provoked criticism from those who say Lotto cash is being given to causes which are either trivial or which should be paid for from everyday state spending.

In recent years, The Big Lottery Fund has handed out hundreds of thousands of pounds to help battered wives in Siberia and to a pressure group for prostitutes.

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Its £402,200 payment to the North of England Refugee Service is to help successful asylum seekers complete paperwork for subsidised housing and benefits.

It is part of more than £2.1million in lottery cash sent to asylum organisations over the past year.

More than £75million has been pumped into asylum causes since the lottery began 12 years ago.

A description of the purpose of the £402,000 project says asylum seekers who win the right to stay in Britain are given 28 days' notice to leave accommodation which is provided while their case is considered.

It adds that in this time they have to apply for a National Insurance number and benefits but because the application procedures take weeks to complete, the refugees are very often left homeless.

However, when the Daily Mail contacted the group it declined to reveal how many had suffered in this way.

Asylum seekers are given housing and benefits by the National Asylum Support Service - although many decline the housing because they would rather live in London than in areas such as the North-East where the homes are provided.

If they are given refugee status, they have four weeks before NASS support stops. Homelessness, however, is unlikely because councils have a legal duty to find them housing.

The Home Office has a detailed policy on how to help refugees integrate into mainstream society. A series of grants to help voluntary organisations provide advice are to be made early next year but payouts already total more than £ 6million a year.

Groups helping refugees settle can also get help from European Community grants.

Figures from the North-East group show the region had fewer than 4,000 asylum seekers last year. Around 1,500 of these will, on average, be granted refugee status or leave to remain.

The North of England Refugee Service published a report on helping asylum seekers settle in 2002 when there were 17,000 in the North-East. It did not suggest any refugees had become homeless.

Ruth Lea, of the Centre for Policy Studies, has written a report which found lottery cash was being used to supplement taxpayers' money.

She said the principle of the lottery was that "good cause money" would pay for things the Government would not otherwise fund.

She added: "Whatever the rights and wrongs of this grant, it does not appear to fit that criteria. The principle is being subverted."

The Big Lottery Fund is the good causes board that replaced the discredited Community Fund.

It was wound up after giving £420,000 for a project to breed fatter guinea pigs for Peruvians to eat.