The National Secular Society raised concerns with Hampshire County Council about Zion Projects in Eastleigh after finding a video from 2020 in which the charity's chair called Islam "demonic".
Zion Projects received £19,750 from the council last year to "help to provide a range of projects including a community café".
In response, the council told the NSS it is "conducting an urgent review" of its relationship and funding of Zion Projects.
Charity chair calls Islam "demonic" and "spiritual wickedness"
In a now-removed video on Vimeo, Zion Projects chair and trustee Danny Stupple responded to a question about Islamic 'calls to prayer' being broadcast during the Covid-19 lockdown by saying "a very strong force of spiritual wickedness known as Islam is engaging in warfare against the Lord with its open air prayers".
He said that Islamic prayers are "one example" of "the enemy" trying to use the pandemic, adding that the Islamic system of belief "is truly demonic".
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