The Help for Heroes charity has said it will not accept money raised by English Defence League (EDL) leader Tommy Robinson.
A Just Giving website page which Mr Robinson, who also uses the name Stephen Yaxley-Lennon, set up after last week's murder of Drummer Lee Rigby in Woolwich was shut down after talks between administrators and the forces charity.
Before it was closed down more than £3,300 had been pledged to the EDL leader, who said he was planning a 17-mile sponsored walk from Westminster to the scene of the killing "to lay a wreath in support of our troops".
More than 1,000 far-right EDL supporters had earlier gathered outside Downing Street chanting "Muslim killers off our streets" and "There's only one Lee Rigby".
Mr Robinson addressed the crowd, saying: "This is a day of respect for our Armed Forces."
The crowd repeatedly chanted "coward" after he claimed Prime Minister David Cameron was on holiday "because he doesn't care".
He added: "They've had their Arab Spring. This is time for the English Spring."
A smaller group of anti-fascist demonstrators also gathered near Downing Street holding an "EDL Racists" banner.
The two sides threw bottles at each other before police in riot gear intervened. Thirteen people were arrested for public order offences through the day, police said.
A Help for Heroes spokesman said: "He's the only one that's come to our attention but tonight we'll be doing a cross-count to make sure that anyone else that's saying they're EDL will not be allowed to fundraise for us.
"It's the same for any political party, we don't allow political fundraising. As a charity, we're non-political."
The charity said that all donations would be refunded.
On Twitter, Mr Robinson denied that the EDL were a political party and said he was "really gutted".
"Shocked that political correctness has even gripped our armed forces charity. Amazed that a charity rejects a potential 100g," he wrote.
He said he still planned to complete his walk across London.
Drummer Rigby was wearing a Help for Heroes t-shirt when he was killed and the charity has been inundated with donations since the tragedy.
Two suspects remain under arrest at separate hospitals in London after being shot by armed police at the scene where the soldier was hit with a car before being stabbed and hacked to death.
A total of 10 people have now been arrested and questioned by police over the killing