LONDON (EJP)---NatWest bank has frozen the accounts of a controversial Palestinian charity after a group of families of Israeli suicide bomb victims launched legal proceedings saying the British bank is supporting a group with links to terrorism.

According to the group who are suing NatWest and its parent group RBS in America, saying the London-based charity Interpal has been a major funder of Hamas.

While Hamas is the ruling party in the Palestinian Legislative Council it is also a proud supporter of terrorism and runs its own terrorist groups.

Interpal has always denied that it has any links to Hamas and points to two UK Charity Commission investigations which cleared it of any wrongdoing.

In 2004 the Board of Deputies of British Jews was forced to pay an out of court settlement with Interpal after it mistakenly branded the charity a terrorist organisation in a press release.

However, in the US there is no ambiguity and in 2003 Interpal had its assets blocked and frozen and the charity was a named a "specially designated global terrorist". And in the UK a new CC investigation was launched after a BBC documentary appeared to show links between Hamas and Interpal sponsored projects in Hebron in the West Bank.

Following NatWest decision, Interpal moved its monies to the Islamic Bank of Britain.

A NatWest spokesperson exaplained why the accounts were frozen. “NatWest has no knowledge of the alleged terrorist activities of either Interpal or other groups named in the complaint. In view however of the Court’s ruling and the potential for future risk of liability, NatWest has regrettably had no alternative but to close Interpal’s accounts. NatWest remains confident that its defence of the US proceedings will prevail,” the spokesperson said.

Outrageous

Ibrahim Hewitt, Chairman of Interpal’s Board of Trustees, spoke out about the situation“It’s an outrageous case and has repercussions for all charities of a politically sensitive nature.”

The CC said its investigatoin is ongoing but it has no connectoin to the decision to freeze the accounts. “The scope of the investigation will include concerns about the potential for indirect and inappropriate links between the charity and organisations or individuals who appear to support the militant or terrorist activities of Hamas and the connected duties and responsibilities of the trustees,” a CC spokesperson said. “At this stage, we do not intend to exercise any of our protective or remedial powers in relation to Interpal. We have not frozen the charity’s assets and at this stage we do not intend to do so.”

NatWest last year lost its first battle in the court case brought by families of victims of suicide bombings in Israel seeking damages in the US.

A spokeswoman for the bank said: "It is important to remember that Interpal has been fully cleared by the UK Charities Commission.

“We are disappointed with the court’s ruling and are discussing the position with our legal advisers. This is only the first stage of the court proceedings and we will continue to vigorously defend our case."