The Charities Regulator is being accused of trying to shut down free speech.
It comes after it told the Project Arts Centre in Dublin's Temple Bar to take down a mural calling for the eighth amendment to be repealed.
The centre, which is registered charity, has painted over the artwork over fears it could lose funding.
"Threatening an organisation’s charitable status for engaging in ‘political’ art is a new departure," said Liam Herrick, director of the Irish Council for Civil Liberties (ICCL).
"We’d be very concerned about how the regulator defines what is or isn’t political art? Where is the line drawn and who decides that?
"There are also serious questions about the role of the Charities Regulator in policing the freedom of expression of charities.
"Are we likely to see a much wider role for the regulator in relation to freedom of speech by organisations and institutions, including the Catholic Church?"
Project Arts Centre had previously been ordered to remove the mural by Dublin City Council in 2016 on the grounds that it did not have planning permission.
On that occasion, ICCL placed two replica murals in the windows of their former offices and were prosecuted for that action.
Reacting to the controversy the pro-life LoveBoth campaign said that if publicly funded buildings are going to be used to advertise either side in the abortion referendum, then they felt the only fair thing to do is to allow both sides equal time and space.
"From the information publicly available, this decision by the Project Arts Centre was taken after advice received from the Charities Regulator who took an opinion on whether it was appropriate for a charity like the Arts Centre taking part in such a political campaign," said LoveBoth spokesperson Cora Sherlock.
"Despite our repeated requests for equal access to space in the Project Arts Centre we have received no access, nor any realistic prospect of access in the time remaining before the referendum.
"Perhaps the artist Maser was trying to be ironic by painting a picture of a heart to support abortion the Government’s abortion on demand plans. However, people must know that the first thing abortion does is to stop the beating heart of a small unborn child.
"If artists want to promote respect for all people, then they should be calling for a ‘No’ Vote to Governments abortion plans on the 25th of May."
Responding to Ms Sherlock's comments the Communications Manager of the Project Arts Centre Melanie Wright confirmed the LoveBoth campaign did submit a request to Project Arts Centre to install a mural to which they received a prompt response.
"The LoveBoth project were invited to submit a proposal in relation to the artwork they were proposing and information relating to the artist they would be working with. To date Project Arts Centre has received no such proposal from the LoveBoth Campaign."