An application by the BBC World Service Trust for US government funding to help combat censorship in countries such as China and Iran has met with a furious response in America.

Some figures within rival US international broadcasters such as Voice of America are said to be "deeply angry" that, at a time when the Congress is embroiled in a delicate budgetary standoff with the Obama administration, the World Service Trust is hoping to receive US tax dollars.

One Washington source said that the Broadcasting Board of Governors, the US government agency which distributes about $760m of public money annually to five US international broadcasters, should receive the funding and not the BBC World Service Trust.

"We are deeply angry here in the States. The Voice of America is the US government's international broadcaster and needs support," the source added. "This is coming at a time when the US government is cutting funding for the BBG as well as National Public Radio and people are angry that money is going to the BBC World Service Trust.

"The sums which the trust is now seeking are puny but it's the symbolism that's important. Americans are trying to conserve resources and our money is going to something which supports the work of a foreign broadcaster – it's infuriating."

The US state department said no decision had yet been taken on the BBC World Service Trust's proposal for funding – believed to be a low six figure sum – for anti-jamming technology.

Courtney Austrian, office director, policy planning and public diplomacy at the Bureau of Democracy, Human Rights and Labor, said: "To clarify the situation, earlier this month the BBC World Service Trust, along with many other organisations, was invited to submit a proposal for funding in the area of internet freedom to the state department.

"This invitation was extended based upon a statement of interest the World Service Trust had previously submitted. We have not yet received a full proposal from any organisation and no funding decisions have yet been made."

A spokeswoman for the BBG, which funds America's five international broadcasters – Voice of America, Radio & TV Marti, Radio Free Asia, Radio Free Europe and Middle East Broadcasting Networks – declined to be drawn on the row. "Competition for funds from the state department is ongoing," she said.

News of the BBC's application for the grant from the US state department to develop anti–jamming technology in repressive countries such as Iran and China, revealed by the Guardian, has also met with a critical response in America.

Under the heading "Your tax dollars funding a second left wing radio network: the BBC", Thomas Lifson wrote on the American Thinker blog: "The BBC has a problem with political bias at least as bad as that of NPR. But that is no obstacle to shipping money, borrowed from China, to yet another left wing network. Don't worry: we'll just let our children pay for it when the Chinese come to collect."

A diary item on the New York Magazine's website added: "Just wait til the anti-NPR brigade gets wind that U.S. funds are going to foreigners."

However, BBC World Service sources insisted that American money will be going to the World Service Trust – which is the corporation's international charity – and not to the World Service, the international broadcaster.

"It is quite reasonable that project by project work by the trust could apply for state department and US funding," said a BBC World Service Trust source.

The BBC World Service Trust has previously received $4.5m in US international development funding for an ongoing media and development project in Nigeria and is bidding for another $293,000 for similar work in Burma.

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