Greenpeace is determined to keep operating in India even after the federal government froze its bank accounts, leaving it with no funds to pay wages to hundreds of staff, its country head said on Thursday.

The home ministry blocked foreign funding to the local branch of the environmentalist group in April as part of a wider crackdown against international and domestic non-governmental organisations (NGOs) found to have misreported foreign aid.

Greenpeace took legal action against Prime Minister Narendra Modi's nationalist government after bureaucrats found holes in its balance sheet and suspended transactions for six months.

"The government has made it impossible for us to operate but our employees are willing to work without pay for one month because they see that the larger commitment has always been to fight against injustice," said Greenpeace India head Samit Aich.

Greenpeace workers - who have campaigned against genetically modified crops, nuclear power and toxic waste management - said their activism did not hurt the country's economy.

Aich said the government's attempts to silence rights groups were attracting fresh funds and their support was growing despite the crackdown. Greenpeace says it has more than 75,000 domestic donors but all of its local bank accounts have been blocked.

Ministry officials say an audit of Greenpeace's accounts showed that Rs 6 crore ($943,000) in foreign funds were not accounted for and the money was paid directly to activists to obstruct development projects.

"We have evidence to show that Greenpeace was paying villagers to become obstructionists. The accounts in which they receive domestic aid have not been frozen, so why are they complaining?" B.K. Prasad, a senior home ministry official, told Reuters.

Prasad, who is overseeing the crackdown against NGOs, said the action against Greenpeace in April exposed the extent of fraud in civil society groups.

The government has also placed the Ford Foundation, a prominent private U.S. foundation that makes grants to Indian non-governmental organisations (NGOs), on a watch list.

It has also appointed auditors to investigate the finances of charities funded by the foundation run by Microsoft co-founder Bill Gates and his wife, Melinda.

Prasad said prominent charities were violating the Foreign Contribution Regulation Act - a law that bars overseas donations to NGOs of a "political nature". The US State Department has sought clarification over the restrictions.