The 2002 train attack sparked riots across Gujarat
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A UK-based campaign group has alleged that money raised for charity in the UK has been given to hardline Hindu organisations in India.
In a report it alleges that activists loyal to one group, the RSS, have siphoned off money donated to help in disaster relief.
This has been denied by one of the groups responsible for the fundraising.
These groups, the report says, were involved or implicated in violence or hatred against Muslims and Christians.
The report, released by the group Awaaz - South Asia Watch, says big donations from members of the public in Britain ended up in the hands of groups such as the RSS.
The RSS (National Volunteers Corps) is a body which provides ideological backing to several hardline Hindu organisations as well as India's ruling Hindu nationalist Bharatiya Janata Party.
It aims to turn secular India into a Hindu nation - its critics say its hardline ideology is based on intolerance towards the country's minorities.
Much of the money in question was raised as part of wider humanitarian appeals.
Denial
Allegations of this sort have been raised before and are currently being investigated by the British Government body that regulates charities.
One of the British organisations accused by Awaaz, Sewa International, said it would be inappropriate to respond to the report while that investigation was taking place.
However, Sewa International's sister organisation in India, Sewa Bharati, has strongly denied that any money it has received has been used for Hindu nationalist activity.
The release of the Awaaz report has been timed to coincide with the second anniversary, on Friday, of the widespread sectarian killings in the Indian state of Gujarat in 2002.
More than 1,000 people, mostly Muslims, died in the riots that followed the killing of nearly 60 Hindus on board a train, allegedly by a Muslim mob.
Some estimates, however, have placed the numbers of those killed at about 2,000.