The Supreme Court of Canada has decided to review a controversial law that allows the government to limit spending by lobby groups during election campaigns.

Alliance Leader Stephen Harper -- a vocal critic of the law -- said Thursday it merely stifles free speech.

The case centres around what's known as the electoral gag law -- a section of Canada's Election Act that restricts spending by special-interest groups on election advertising to $3,000 in each riding or about $150,000 nationally.

It also requires groups to register with the Commission of Elections Canada if they spend more than $500 on ads and to file reports on campaign spending. Violators can face fines of up to $25,000 and jail terms.

In a decision Thursday, a three-judge panel granted approval for the federal government to appeal an earlier Alberta ruling that struck down the restrictions as an infringement of free speech.

No date has been set for a full hearing of the case.

"It is simply a bunch of people who don't like that somebody gets out there and advertises or pushes a political view that offends them or insults them or in the case of the (National Citizens Coalition) frequently attacks politicians," Harper told reporters in Ottawa.

The National Citizens Coalition (NCC), a conservative lobby group formerly headed by Harper -- the current leader of the Canadian Alliance -- is challenging the law.

"I expect to be attacked by groups on the left or others ... in the next election. They can run these ads, I don't care. Let them run them. Let them get their money where they want to get it," Harper said.

The NCC contends the law limits political debate by hindering the ability of grassroots organizations to participate in the electoral process.

The Alberta Court of Appeal, in a 2-1 decision in December, overturned the law's restrictions as an infringement of the guarantee of free speech enshrined in the Charter of Rights.

The case came to court when the NCC was charged with violating the Election Act after airing a television ad during the 2000 federal election.

The ad promoted the NCC's battle over the constitutionality of the law -- the group neither registered with the elections commission nor reported spending more than $500 to produce the ad.

"We should be encouraging large organizations that have important views on public policy to go to the airwaves and influence the public. That is the way to get political change. If the public can be influence that's a positive thing," Harper said.

Federal lawyers have said the law is vital because citizens have the right to know who is bankrolling election campaigns.

It is also aimed at preventing national groups from targeting specific MPs with high-spending ad campaigns in their local constituencies.

The law is also currently being challenged in Ontario's courts.

Defenders of the law fear that if it is overturned Canada may go the way of the United States where free-spending campaigns have driven the cost of winning election to astronomical levels.

With reports from the Canadian Press