Criticism of Liberal MP Justin Trudeau's planned appearance at an Islamic conference has prompted a sponsor to bow out after scrutiny of the event highlighted the group's stripped charity status.

The organizers of the Reviving the Islamic Spirit conference say the decision for IRFAN-Canada to withdraw was made after the Liberal leadership hopeful came under fire for his plans to attend the annual event.

IRFAN had its status revoked by the Canada Revenue Agency in 2011 for allegedly using deceptive fundraising to send nearly $15 million in donations to organizations with ties to the Islamic militant group Hamas.

IRFAN denies any wrongdoing, is challenging the ruling and the group's lawyer said it decided to withdraw from the upcoming conference to avoid causing further controversy.

Some Jewish groups and media outlets raised concerns last week about Trudeau attending a conference backed by IRFAN.

Trudeau has already brushed off questions about making a keynote speech on Dec. 22.

When asked last week about his participation plans, he said much of the controversy over his appearance was based on misinformation.

"I've heard a number of people express concerns about this event that I certainly don't understand and I don't share," he said at a news conference.

"Most of the organizers are young Muslims who are looking at trying to bridge the gap between the reality for Muslim Canadians and mainstream Canada and I'm very proud to be able to contribute."

Sponsor withdrew to 'avoid creating further controversy'

Naseer Syed, a lawyer for IRFAN, said Sunday that the group has been unfairly criticized.

He said it's unfortunate that the controversy over Trudeau's participation drew attention to IRFAN's dispute with the federal tax agency and prompted the group to withdraw from the conference.

The allegations regarding Hamas are misleading, Syed said. The non-profit organization sent medical supplies and money to people who needed it through local certified charities, he said.

IRFAN nevertheless decided to withdraw to avoid creating further controversy, he said.

"The ultimate thing that changed this year was politics," he said.

Farhia Ahmed, a spokeswoman for Reviving the Islamic Spirit, said she hopes the issue won't detract from the convention.

She said it's organized every year by about 400 young Canadian volunteers and the goal is to foster intelligent debate and tolerance.

The aim, she said, is to create an environment where people can come to "exchange ideas."

Trudeau wouldn't be the first political figure to speak at the conference.

Previous participants include the late NDP leader Jack Layton and federal cabinet minister Julian Fantino, who at the time was Toronto's police chief.

Last year, on the conference's 10th anniversary, Prime Minister Stephen Harper sent a congratulatory statement and issued certificates to each of the event's speakers.