Second-home owners in the Lake District are exploiting a loophole to claim £10,000 from a coronavirus support fund, an MP claims.
Tim Farron warns they are applying for small business grants having declared their properties as holiday lets.
The representative for Westmorland and Lonsdale wants the government to change the law so people who "pretend" to run businesses no longer benefit.
The government urged people not to misuse the support it is offering.
The law currently enables people who use second homes as businesses to avoid council tax, and holiday lets can be registered for business rates if the property is available to let for 140 days per year.
Liberal Democrat Mr Farron believes as many as 1,500 people in the South Lakes area have properties masquerading as holiday lets and are therefore able to claim grants from the coronavirus business fund.
'Millions of pounds'
"In the midst of the Covid-19 crisis, we find there's an extra problem because the government support package for businesses can be accessed by these people who have second homes, who aren't running a business but who are able to pretend they are.
"That means there's a free £10,000 available to every second-home owner.
"There are thousands of people who are eligible to take advantage of this. That's millions of pounds of public money."
Martin Sach, chief executive of the Holiday Home Association, told BBC Cumbria he "certainly would not endorse anyone making a false claim".
He added local authorities have the responsibility to "check the veracity of registrations" of holiday lets.
The government has previously promised to take action to prevent second-home owners avoid paying council tax.
In response to Mr Farron's claim, the Treasury said it encourages people to respect the spirit of the measure and not misuse the support it is offering.