The paper reported that Erik Haaest received grants totaling 100,000 Danish krone from the Danish Arts Council, a government-funded body, in 2004 and 2006.
In a conversation with the Danish paper earlier this week, Haaest called Anne Frank's diary a "forgery" and refused to renounce earlier publications in which he wrote that the gas chambers never existed and that the number of Jews who died in the Holocaust has been greatly exaggerated.
The Arts Council said in response that it does not deal in censorship and "it is not our job to judge [people's] opinions."
Holocaust denial is not illegal in Denmark, though it is in many other Western European countries, including Austria, which jailed British Holocaust denier David Irving in 2005.
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