Charities will be banned from using Government grants to fund campaigns to pressure ministers to change policies under new rules.
A clause inserted into new and renewed grant agreements is aimed at making sure that taxpayers' money is spent on improving people's lives and good causes, rather than lobbying for new regulation or increased funding, the Cabinet Office said.
The Government insisted the clause will not prevent charities and other organisations in receipt of Government grants from using privately-raised funds for lobbying campaigns.
Cabinet Office Minister Matthew Hancock said: "Taxpayers' money must be spent on improving people's lives and spreading opportunities, not wasted on the farce of Government lobbying Government. The public sector never lobbies for lower taxes and less state spending, and it's a zero sum game if Peter is robbed to pay Paul.
"These common sense rules will protect freedom of speech - but taxpayers won't be made to foot the bill for political campaigning and political lobbying.
"This Government is standing up for value for money, so we can keep taxes down and support better services that people can rely on."
The system has been trialled in grants provided by the Department for Communities and Local Government and ministers insisted it had not curtailed the ability of charities such as Shelter from lobbying on housing legislation.
The move follows work by the right-of-centre think-tank the Institute of Economic Affairs (IEA) into so-called "sock puppets", where taxpayers' money is handed to pressure groups which then campaign for policy changes or extra money.
Chris Snowden, head of Lifestyle Economics at the IEA, told the Daily Telegraph: "This is very good news for taxpayers who will no longer be forced to pay for the Government to lobby itself.
"At every level - local, national and European - people have been subsidising political campaigns that they may not know about and might disagree with.
"Campaigning is an important part of a thriving democracy but charities and pressure groups should not be doing it with taxpayers' money."