Prominent financial backers of environmental causes have warned any move by the Abbott government to tighten tax concessions for donations to green groups will dry up funding to protect nature and the climate.

And shadow Attorney-General Mark Dreyfus - Labor's frontbench representative on a parliamentary committee inquiry now looking at the charitable status of almost 600 environment groups - has declared the review an ideological attack by the government on political advocacy.

Rob Pallin, Chairman of Paddy Pallin group of companies and Pallin foundation. Credit:Steven Siewert

The Abbott government recently launched a parliamentary committee inquiry into a registry of green groups that allows donors to groups like the Wilderness Society and Greenpeace, along with smaller organisations, to deduct contributions from their tax.

The government says the review is necessary to ensure tax concessions do not support illegal activity and will ensure environment groups face high standards of transparency. Some Coalition MPs have also sought to draw a distinction between groups that carry out on-the-ground environment restoration works and those engaged in political campaigns.