A new row has broken out over the so-called tampon tax after it emerged that a quarter of a million pounds from a controversial levy on women’s sanitary products is to be given to an anti-abortion organisation.

Under pressure from campaigners after failing to honour a pledge to scrap the 5% VAT on sanitary products, former chancellor George Osborne said that more than £10m a year would be redistributed from the tax receipts to women’s charities.

But there was consternation on Saturday night among women’s groups and politicians who had campaigned on the issue after it emerged that £250,000 of that money is going to Life, a charity that campaigns against abortion and has been at the centre of controversy over the information provided by a network of unregulated pregnancy counselling centres.

A spokesperson for the End Violence Against Women Coalition said: “We are surprised to see that Life is the recipient of a very significant tampon tax grant. The government set out clearly that this money would be spent in ways that would address women’s specific needs and inequalities. It is hard to understand how a service offering counselling based on the fundamental premise that abortion is wrong, to vulnerable women, can do that.”

The government announced last Friday that 70 organisations across the country would share £12m from the tampon-tax fund, which it said would improve the lives of disadvantaged women and girls across the country.

Rob Wilson, the minister for civil society, gave details of the funding on a visit to the Suzy Lamplugh Trust, which is to receive £200,000 to help increase its casework support service for women who are being stalked.

Four other charities, ranging from the Women’s Rape and Sexual Abuse Centre Cornwall, which is getting £179,157, to Black Country Women’s Aid (£240,401), were highlighted in a press notice from the Department for Culture, Media & Sport.

No mention was made of Life, but the organisation appears on a separate long list, which says it will receive £250,000 for “housing, practical help, counselling, emotional support and life skills training for young pregnant women who are homeless”. There has been surprise not just at the award, but at its size: it is one of the largest donations on the list.

Life describes itself as unique, combining “pro-life advocacy and education work with nationwide services providing positive alternatives to abortion”. It served notice last year of plans to increase its online presence to compete with established service providers such as Marie Stopes and the British Pregnancy Advisory Service (BPAS).

Among others who criticised the grant was Labour MP Paula Sherriff, whose successful amendment to last year’s budget led to the government pledging to abolish the tax.

“It will seem bitterly ironic to many women if we are taxed for our biology, only for the government to hand over that money to organisations that don’t even believe we should have control over our own bodies, especially when so many are left without basic sanitary protection,” she said.

“Just this Thursday, I led a Commons debate on period poverty and discussed terrible cases like the homeless women who can’t afford tampons and whose health is at risk, the girls in Leeds who play truant during their periods and a charity that provides free sanitary products to Africa now getting requests from schools in Britain because so many female pupils cannot afford them.

“Tackling these issues would surely be a better use of the tampon tax fund. The minister agreed on Thursday to look at funding for sanitary protection in schools and homeless shelters, and I will be asking the government to review their allocation of the tampon tax fund urgently.”

There was also criticism from the Women’s Equality Party. Its leader, Sophie Walker, said: “We consider any restriction on women’s reproductive rights as violence against us and thus it was a shock to learn the government has used the tampon tax fund to support a charity whose mission is anti-choice and aims to ‘make abortion a thing of the past’.

“While we appreciate the work Life does to support homeless pregnant women and care for children with life-limiting or terminal illnesses, we are very disappointed to see the allocation of such significant funds to this one charity while many others struggle, particularly those supporting black and minority ethnic women and disabled women who experience some of the highest rates of violence against them and yet are consistently at the bottom of the list for funding.

The government had originally faced a potential rebellion over the issue, after an amendment tabled by Sherriff won the backing of Eurosceptics keen to assert Britain’s power to set its own tax rates. Osborne had originally pledged to remove the tampon tax in November 2015, but was unable to do so due to regulations applied by the European Commission that prevented member states from doing so.

The government said on Friday that it is committed to continuing the fund until EU rules allow a zero rate of VAT to be applied to women’s sanitary products and that a decision will be made on the future of the Fund once this has been achieved.

Wilson said at the launch of the fund: “From Cornwall to Dundee, the tampon tax fund continues to benefit organisations in every corner of the UK working to improve the lives of disadvantaged women and girls, including those who’ve been affected by violence.

“This fund is helping to improve lives, supporting our ambition to create a fairer, shared society for everyone. I’m glad that so many worthwhile organisations will benefit from this money.”

A spokesperson for Life said: “We believe that our support services for women are not a luxury but are essential for them to have the space to look at options for continuing their pregnancies with support.”