A branch of the Conservative Party has received £10,000 from a government Covid fund designed to help small businesses during the pandemic.
Ashford Conservative Association, in Kent, has successfully applied through the Small Business Grant Fund.
Brendan Chilton, Labour group leader on Ashford Borough Council, has branded the payment "disgraceful".
But Ashford Conservatives' chair Janet Rymer-Jones said the bid had met the necessary criteria.
News of the grant was revealed at a council meeting after a Freedom of Information request from local news site Ashford Voice.
Mr Chilton said the payment showed "contempt" for "families and businesses struggling through this pandemic".
He called for the money to be returned "so that it can be diverted to deserving businesses who need support".
Small business rates relief
Ms Rymer-Jones defended the application, saying the association had "applied for the grant in line with the criteria outlined by the council" and "the bid met the criteria otherwise it would not have been granted".
Under the rules of the scheme, Ashford Conservatives were eligible to apply to the fund because they have an office on which they pay business rates.
A spokesman for the borough council, which administers the fund, said: "The Ashford Conservatives' property receives small business rates relief which made it eligible for the government's small business grants scheme.
"The criteria for which businesses would qualify was set by the government, and local councils paid the grants out from money provided by the government."
The authority has paid out around £29m to almost 2,500 borough-based businesses through the grant scheme, he added.