OTTAWA — The Harper government is brushing aside accusations it's playing politics by withholding cash to the major umbrella group of Canadian aid agencies.

The Canadian Council for International Co-operation said it would lay off staff and put its offices in downtown Ottawa up for sale because it has had no response from the government since delivering its latest funding proposal last fall.

Several other aid agencies are also in limbo awaiting word on their financial futures from the Canadian International Development Agency.

But the dramatic measures announced by the CCIC revived accusations the Tories are determined to punish non-governmental organizations that contradict its foreign policy.

"The CCIC is reputable, and intelligent, and principled and analytic, and would be of a tremendous help as it has been over the years to the formation of government policy," Stephen Lewis, Canada's former UN Special Envoy for AIDS in Africa, told The Canadian Press on Tuesday.

"It's the politics of George Bush. If you agree with us we'll support you; if you don't agree with us, we'll pull the rug out from under you."

The CCIC gets $1.7 million of its $2.4 million annual budget from CIDA, and has received federal funds since the 1960s.

"CCIC plays an absolutely critical role in representing the international community and addressing issues of poverty and justice globally," said Robert Fox, executive director of Oxfam Canada.

"To find themselves in a situation where they are laying off staff and where they are putting their premises on the market is just an outrage."

The CCIC was a vocal critic of the Conservatives' decision to cut funding last year to the Christian aid organization KAIROS, and has continually said the pursuit of a free-trade deal with Colombia has given short shrift to human-rights issues.

"Just like the cuts to KAIROS before them, and the cuts to so many other NGOs, these are politically motivated and punitive," NDP Leader Jack Layton told the House of Commons.

"It is a powerful message to the NGO community: 'Watch what you say or you are going to lose your funding.' Is that not what this is all about, muzzling the organizations that speak for the world's poor?"

Prime Minister Stephen Harper deflected the criticism, saying CIDA is looking at ways to target funds to directly help struggling countries.

"We want to make sure that those aid dollars are spent as effectively as possible," he said.

"That is the basis on which money is given to organizations."

Later, International Co-operation Minister Bev Oda put all aid groups on notice not to take any past funding commitments from the government for granted.

"There is no entitlement," she said. "We will be renewing every proposal that comes before CIDA asking for support on the kind of delivery of results, the accountability."

A Commons committee was told Tuesday that the International Planned Parenthood Federation has heard nothing from CIDA for almost a year for its three-year extension of funding.

Jolanta Scott-Parker, the executive director of the Canadian Federation for Sexual Health, told the Commons committee on foreign affairs and international development that Planned Parenthood has been a Canadian partner since the 1960s "regardless of the party in power."

And that includes the current government, which renewed the federation's funding three years ago, said Scott-Parker, who represented Planned Parenthood because its top official was unable to travel to Ottawa.

Scott-Parker told the committee that Planned Parenthood did not want to be drawn into the debate over the Conservatives' G8 child and maternal health initiative not to fund abortion because the group is "neutral" and "non-political."

She said the group has made good use of the money it got in the past from the government -- $18 million over three years, or less than 0.1 per cent of Canada's overall aid budget -- and has done good work for maternal health.

Lewis said several other non-governmental organizations are in a funding limbo. He said the current situation with the CCIC "makes a mockery" of the Tories' G8 maternal-health initiative because the organization has done excellent analysis of the problem.

"They could inform what the government is doing. Sure, they've been critical of government, but that's the role of such organizations. ... You cannot punish them so brutally in this fashion."