Cool Earth, a British environmental group, has declared itself to be "bewildered" at reports that the Brazilian authorities were investigating the activities of its founder Johan Eliasch for allegedly urging foreigners to buy up the Amazon rainforest. Hopelessly naive might be a better description.

Eliasch, a Swedish-born businessman, is a former deputy treasurer of the Conservative party, and now serves as Gordon Brown's special representative for deforestation. In the course of a speech in 2006 he said that hurricanes in the Gulf of Mexico had cost insurance companies "$75bn" (£38bn) and it might be cheaper to buy the entire Brazilian rainforest for "$50bn" (£26bn) thereby preventing deforestation and making hurricanes less frequent.

Eliasch has himself bought up around 400,000 acres of Amazon rainforest, an area about the size of Sao Paulo, Brazil's biggest city. He made the purchase in 2005 and is believed to have paid around £8m for it.

According to its website, the idea behind Cool Earth is that "rainforests are worth much more left standing – both for the planet and for local communities." His organisation, Cool Earth, invites people to donate money to "secure one area of land that would otherwise be sold to loggers and ranchers and to price deforestation out of the market". The charity says that it puts its money into a local trust and that it "employs local people to do the work, helping them to get income from the forest without cutting it down, and make sure the rainforest is worth more standing than cut down". "For as little as £70 you can protect a whole acre" it tells potential donors, while £35 protects half an acre.

So far, so worthy, but the combination of Eliasch's remarks and activities have now caused a growing backlash amongst Brazilians outraged by the notion that they cannot be trusted to take care of the Amazon themselves.

Last week President Lula said that said that foreigners need to "understand that the Amazon has an owner, and that is the Brazilian people". On Monday one of Brazil's main newspapers reported that the police and intelligence services were investigating Eliasch for his claim about buying the forest and Carlos Minc, Brazil's new environment minister, said he was shocked by the report. He announced that one of his first acts in his new post would be to open an inquiry into the matter and it has also been raised within the ministry for external affairs.

Brazil's most popular television show, Fantastico, conducted an interview with Eliasch in which the reporter asked him to explain how Cool Earth came up with its costings for saying that "£35 saves 22 trees, six threatened animals, 11,000 insects and so on". She also asked whether he considered the attempt to buy up the natural heritage of another country to be a form of neo-colonialism. Eliasch refused to say how much he had paid for the land that he has already bought, but denied that he intended to buy up the forest "piece by piece". "I am just a person who adores trees", he told the journalist.

Matthew Owen, the director of Cool Earth, has issued a statement saying that the organisation "does not own any land in Amazon, we fund conservation projects but we are not interested in owning lands which we think would be an inappropriate use of a UK-based charity." He added, "the ownership of the Amazon is a very politicised topic and understandably the government wants to understand what all players are doing. We are successful in bringing ... funding for the protection of the Amazon but there is no evidence whatsoever that we infringed any regulations."

Cool Earth's only real offence has probably been a marketing campaign, which might appeal to potential donors but is grossly insensitive towards the feelings of its intended beneficiaries – a bit like the "sponsor a black baby" adverts that some aid charities used to run. The reality is that the organisation could not buy up the Amazon, even if it wanted to, since much of it is already in public hands. However, as Greenpeace Brazil has pointed out, Cool Earth could actually exacerbate the problem caused by the profusion of false property titles which means that it might end up funding the grilleiros (land-grabbers) and buying lands that are already protected by law.

The storm that it has generated has also diverted attention from the far more worrying news of a sharp rise in the rate of deforestation this year as higher food prices push farmers to expand their slash-and-burn clearances. Tackling this will be the first priority of Carlos Minc, who was appointed to the post last month, following the resignation of the highly respected Marina Silva. The Brazilian government needs external help to support its efforts but Eliasch's comments, which echo an earlier remark by Al Gore that "contrary to what Brazilians think, the Amazon is not their property" are patronising, offensive and massively counterproductive.