Gordon Brown has ordered a freeze on the assets of a Muslim charity, but the latest clampdown on terror funds has hit a separate charity with an identical name.

The chancellor announced on Tuesday that he had ordered British financial institutions to freeze any accounts belonging to the Chicago-based Benevolence International Foundation.

But action to freeze the funds of a similarly named British charity prompted surprise on the part of its chief, Dr Abdul Salih.

Dr Salih told ePolitix.com that the funds of his charity, Benevolence International (UK), had been frozen purely because of its name - even though there was just £312 in its accounts.

The BIF is a Chicago-based charity who's chief executive, Enaam Arnaout, had already been indicted by American authorities on seven counts of racketeering and fraud.

John Ashcroft, the US attorney general, announced the charges against Arnaout in early October, citing financial links to Islamic militants around the world, including al Qaeda and Chechen groups.

The Treasury said there was "strong evidence" to justify its move against the American-based organisation.

It linked the Benevolence International Foundation with Osama bin Laden, claiming there had been personal contacts between senior BIF officials and al Qaeda operatives involved in the 1998 bombings of two US Embassies in Africa and attempts by al Qaeda to obtain uranium for a nuclear weapon.

The chancellor pledged the government would "continue to bear down on the funding of terrorism".

"BIF operates as an international organisation with offices around the world and is extensively involved in funding international terrorism," Brown said.

"I have no doubt that in taking concerted international action today we are cutting off the finances of an extremely threatening fundraiser for terrorism."

On its website, BIF says it is a "non-profit, humanitarian organization" that is "dedicated to helping those afflicted by wars and natural disasters".

At the same time as the Treasury move, it was announced that the Charity Commission had frozen the accounts of Dr Salih's charity.

"This is a temporary and protective measure and will remain in force until the Commission has considered new evidence provided by the US authorities," explained a Commission statement.

"In May of this year the Commission looked into the affairs of the UK charity, following the arrest in the US of an individual associated with the US organisation. At this time no links with the US charity or any evidence of wrong-doing was found."

Dr Salih told this website there was no link between his charity and the American organisation, or between himself and al Qaeda.

"It is the name and nothing else," he said.

"I have been through this before with the Charity Commission. They frightened me when they said al Qaeda and Osama bin Laden," Dr Salih said.

"I don't want my name to be linked with that in any sense."

He said he had already been cleared of any links once. "I have the Charity Commission letter to say that," he added.