The government must work with the charitable sector in order to reduce the threat of terrorism, according to a report published by the UK’s leading charities.

Charities have a significant role to play in diverting vulnerable people from destructive paths, a responsibility underestimated by the government, according to the National Council for Voluntary Organisations (NCVO) and other non-profit firms involved in the report.

The current approach adopted by the government alienates charities, undermines the independence of the Charity Commission and will not succeed in deterring terrorists, the advisory group recommends.

Rather than impose additional regulation on the sector, decision-makers should engage with charitable organisations and promote charity-led counter-terrorism initiatives, they conclude.

“British charities carry out vital work overseas, operating in what are often dangerous and politically-charged environments, building bridges between cultures and helping to diffuse the tensions that feed support for terrorism,” commented Richard Bennett, general secretary of British Overseas NGOs for Development.

“The government must work with our sector to tackle the complex problem of terrorist financing in an overseas context - heavy-handed action will be counter-productive.”

Echoing this sentiment, NCVO chief executive Stuart Etherington added: “The voluntary sector plays a key role in promoting good community relations, connecting with hard to reach groups and encouraging people who may have become disaffected engage with society.”

The advisory group was formed by the NCVO and is chaired Lord Raymond Plant of Highfield.

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