Vancouver punk band Living with Lions will return a loan from music agency FACTOR and withdraw its current album that sparked controversy with its artwork.

The band and its label, Black Box, announced on Tuesday that they would voluntarily return a $13,248 loan from the Foundation Assisting Canadian Talent on Recordings (FACTOR) to produce its latest album.

FACTOR supports the domestic music industry by distributing funding from Canadian Heritage and radio broadcasters.

The band's latest album, entitled Holy Shit: The Poo Testament and released on May 17, features album artwork that emulates the look of a faded Bible and portrays Jesus as excrement. The album art also notes that the band received funding from FACTOR and the Canadian government.

A spokesman for Heritage Minister James Moore blasted the album in a statement to the Vancouver Sun newspaper last week. "The content of this CD is offensive and the fact that it is clearly designed to offend a group of Canadians based on their faith is simply wrong," James Maunder said.

Black Box said the current iteration of the album — featuring the FACTOR logo and an acknowledgment to the Canadian government — will be withdrawn from domestic and international markets.

The album will return in a new version without the logo and acknowledgment "in the coming weeks," the label said.

"We understand the band's desire to maintain their creative integrity ... The material was not intended to be offensive, though we regret it was interpreted that way. Further, we regret the negative attention that this matter has brought to FACTOR," Black Box added.

"FACTOR is an integral part of supporting and sustaining Canadian music domestically and internationally, and their support of our work and that of other Canadian musicians is invaluable."