Should public advertising be used as a political weapon?

What are the ethical ramifications of using public money as a political weapon against a publisher you don’t like?  Business ethics direct quotes the following article as a test case: 

Judgment awaited on withdrawal of newspaper advertising
A Grahamstown court will soon decide if a body of government may legitimately withdraw advertising from a newspaper simply because the authorities do not like the coverage. This is the nub of a case filed by Grocott’s Mail against the Grahamstown City Council, which instituted a boycott of the twice-weekly publication a year ago. ‘The case has far-reaching repercussions, because a victory for the paper will send out a wider signal that public advertising is not available for use as a political weapon,’ writes Professor Guy Berger, chair of the board of Grocott’s Mail, in an article on the Mail & Guardian Online site. He says the issue impacts on public resources being used to skew media houses towards avoiding critical coverage – or, conversely, to sustain and reward those companies that
spec ialise in safe or sweetheart journalism.
Full Mail & Guardian Online article

Certainly BHP Billiton thought nothing of retaliating against Standard Bank for suggesting its Richards Bay aluminium smelter could be shut down during the energy crisis of January/February 2008; and motoring manufacturers think nothing of witholding advertising spend from a motoring publication that prints something unflattering about one of their vehicles.  But that’s all private money and I suppose the companies involved are entitled to vote with their money if that’s what they want to do – although I suspect those companies mentioned would be the first to demand a free press as long as it doesn’t say something negative about them.  But within the realm of public money – well now that’s another thing entirely particularly when the objectionable editorial relates to service delivery or the misbehaviour of public servants.  The Weekly Mail and Gaurdian does a fantastic job though of investigative reporting and listening to its Editor Ferial Hafferjee I can see why.  Guy Berger is another person who understands the need for principle based leadership which is why his clearly articulated position is deserving of recognition.  Be inspired.