"Even the Malaysian Bar receives foreign funding which is earmarked for specific projects. There is nothing wrong with governments and private organisations receiving money from abroad as long as the laws of the country are complied with."
Lim said it was unfortunate that certain elements were questioning motives and casting aspersions on foreign funding.
"The crux is whether the organisations receiving (money) are conforming with the Companies Act and Societies Act."
Lim was commenting on a New Straits Times report last week that certain organisations, including Bersih and Suaram, were receiving such funding with the aim of destabilising the government.
Lim said there was no legislation to restrict foreign funding and added that he was against any such move.
Russia, he noted, recently passed legislation for anyone receiving foreign funding to declare it, "but we do not want to go down that route".
Govt should encourage civil society
Lim said the government should encourage the growth of civil society, not stifle it.
"Certainly we do not want to see the prosecution and persecution of civil society, so long as they act within the confines of the law."
Suaram has been under investigation by the authorities but no charge has been filed against it as yet.
"It's unfortunate that what the government is doing gives the impression - as highlighted by the media - of some form of persecution. I hope this episode will come to a close," Lim said.
Ismail had last week indicated that Suaram would be charged within the week.
However, it was reported that the Attorney-General's Chambers had sent the investigation papers back to the Companies Commission of Malaysia for further investigation.
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