Announcing a first round of awards to deal with poverty, the board said that 627 charities across the country would benefit from pounds 40m of lottery cash. David Sieff, the Charities Board chairman, added that a further pounds 120m would be made available by the middle of December.
More than 15,000 charities had applied for grants in this first round, with 4,500 submissions processed so far. Mr Sieff said: "We're really encouraged that the first theme has struck a chord with many groups up and down the land. We said right from the start we wanted to particularly help small groups working at grass roots who often don't get a share of the big fund-raising money."
The primary aim, he added, had been to give grants "that help those of greatest disadvantage in society and which improves the quality of life in the community." Small community groups were among the main beneficiaries of the pay-out, although some grants were made to big-name charities. Awards ranged from pounds 666,000 to the Strathclyde Poverty Alliance to pounds 174,000 to Lothian Shopmobility, a scheme in Scotland which provides free motorised wheelchairs to the disabled to help them shop. At the lower end of grants, the Phoenix Toy Library in Swindon will receive pounds 500.
However, grants to smaller groups, such as the Vietnamese Mental Health Project, which received pounds 174,000, and the Eritrean Advice and Information Centre in London, prompted charges of "political correctness" from David Mellor, the former Secretary of State for National Heritage.
Mr Mellor told BBC Radio that the board was a "creaky old tub ... piled full of some of the usual suspects of politically correct vehicles". He said it had been "permitted to go its own way", leading to yesterday's disastrous decisions.
Mr Sieff described the attack as "nonsense", saying that the board had consulted more than 8,000 organisations. "I would be very interested if Mr Mellor would like to contact us to actually find out what we are doing, instead of just commenting from the sidelines."
There were also calls for charities to be allocated a bigger share of lottery proceeds than the 6p they currently receive from every pounds 1 ticket. Stuart Etherington, chief executive of the National Council for Voluntary Organisations, said: "The Charities Board has received four times the number of applications than the others which demonstrates the interest of charities to apply for National Lottery money."
While a major step forward, he said the council was concerned that the grants did not make up for the money that charities losing in fund-raising as a result of the lottery - the figure is estimated to be around pounds 330m during the past year. The Home Office announced last Friday that it was funding research on the effect of the lottery on voluntary sector income.
Grants to well known charities included the Citizens Advice Bureaux, the Royal National Institute for the Deaf, Scope and Cancer Research, as well as Mencap, Age Concern, and Arthritis Care.
Beneficiaries broadly welcomed the board's announcement. The Royal National Institute for the Blind stressed that its pounds 188,000 award had to be set against an estimated pounds 500,000 shortfall in donations, which it blames on the lottery. Ann Abraham, chief executive of the National Association of Citizens Advice Bureaux, which received grants totalling pounds 1.5m, said: "This is welcome recognition of the fact that bureaux all over the UK are in the frontline of tackling poverty in their local communities."
Jack Cunningham, the shadow Secretary of State for National Heritage, called for the present system of applications to be reassessed. He said Labour would be setting up its own independent advisory group to advise the party on how best the lottery money could be distributed. "At present, it is too bureaucratic and complex. The public also have a right to know why particular charities are favoured and where their money is going."
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