Crandall University will not apply for $150,000 that it has received annually as it attempts to move away from an ongoing controversy over what some say are anti-gay policies, according to its president.

The privately-owned Christian university has $150,000 a year in funding from the City of Moncton.

That funding has upset some gay rights groups, who say public money is being used to fund a school with anti-gay policies.

Bruce Fawcett, the president of Crandall University, said the university will not apply for the city's annual capital contribution of $150,000 this year.

"We found it to be a distraction from our key mission which is students and educating them and investing in them and we thought we needed to move on from that at this point," he said.

But the privately-owned university isn't moving away from its policies that have sparked the controversy in the past. Same-sex relationships are still unacceptable for staff and faculty.

"The policy simply says that sexual relationships are to take place in the confines of a marriage between one man and one woman," Fawcett said.

The policy is set out in the school's Moral Code.

Fawcett said the province's Human Rights Act gives them the right to set staffing policies in keeping with their Christian beliefs.

"I suspect there are some who disagree with that policy and we support their right to do that," he said.

"But we feel the policy is something that is rooted in religious freedom and we feel in the same way that different points of view can exist in society, ours can as well as others can."

In recent years, Crandall also received close to $2 million in provincial funding for an expansion.

Eldon Hay, a retired religious professor and United Church minister, who also has a gay son and daughter, said he is upset by the funding that is heading to Crandall University.

"They are paying taxes and that money is going to an institution that says you can't work here," Hay said.

He said he has no objections to Crandall setting its own policies if it raises its own money.

Crandall University is a liberal arts school in Moncton and has roughly 1,000 students.