The Tel Aviv municipality's deputy treasurer, Herzl Sayag, said Sunday that he is suspending annual funds approved by the city council for the Tel Aviv branch of the Aguda (the Association of Gay, Lesbian, Bisexuals and Transgenders in Israel).

In a letter informing the director general of the municipality, Menachem Leiba, Sayag said his decision was prompted by the announcement by Aguda's chair, Mike Hamel, that he plans to run for a seat on the city council in the elections to be held in about a year.

Sayag said he was approached on the matter by the deputy mayor, Yael Dayan (Meretz), who gave him a list that ran in the Gay publication Hazman Havarod (Pink Times), according to which "a political list will be formed to compete in elections to local authorities and which will represent the proud community."

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The deputy treasurer explained that "according to regulations, a non-profit organization that applies for financial aid is barred from passing those funds on to a political party."

Sayag added that the suspension of funds will be in effect until the municipality receives clarifications from Aguda.

Municipal support totaling NIS 60,000 represents a major chunk of Aguda's annual budget of NIS 300,000. Dayan has represented the GLBT community's interests for years, but Hamel was furious Sunday at her move to suspend the city's support.

Hamel, who does not intend to step down as Aguda's chair, said: "I personally intend to form and lead a proud list that will compete in city council elections. A poll I conducted found a potential for three seats for a list like this. The clarifications are very simple: The association is not involved in any political activity and is not organizing for such activity. This was also made clear to Ms. Dayan, but unfortunately she is mixing her personal political motives into the issue of funding for the activity of associations, and apparently considers such a list threatening. This is pettiness on Dayan's part."

Dayan said in response: "On the municipal allocations committee we are scrupulous about not providing municipal support to any entity that might pass the municipal support on to some political track. If Hamel runs for office, he has to resign from the chairmanship of the Aguda. I have a life's work to which the label 'petty' does not stick."

A municipal spokesperson said: "The municipality is waiting for clarification that the financial aid will go to the non-profit organization and not a political faction."