Colin Barnett has admitted tomorrow's Vasse by-election was the reason the Liberal candidate was invited to the presentation of $2 million in public money to the City of Busselton, while other parties were excluded.
The admission prompted the Opposition to accuse the Premier of politicising the independent Lotterywest.
Political commentator Martin Drum queried why a big cheque was presented in the lead-up to a by-election.
Mr Barnett presented the $2.1 million Lotterywest cheque to support youth facilities, including a skate park, at a ceremony in Busselton on October 7.
In the Upper House this week, Labor asked why neither Nationals candidate Peter Gordon nor sitting MLC Colin Holt, "a member of the Liberal-National Government", had been invited.
Mr Barnett replied: "There is a by-election in Busselton. The invitation list to this event reflects the nature of politics."
Opposition Leader Mark McGowan said Lotterywest should be above politics.
"Mr Barnett has clearly indicated in his answers to Upper House questions that he is politicising that organisation," he said.
Mr McGowan said because Vasse had no Lower House representation until tomorrow's by-election, no candidates should have been invited and instead South West MLCs of all stripes should have been there.
Dr Drum, senior politics lecturer at Notre Dame University, said Liberal candidate Libby Mettam's participation could have given the impression she had campaigned for the money, which was "probably not true".
"Of greater concern, is how a major Lotterywest cheque came to be distributed in Busselton during a by-election campaign," he said. "Is it just coincidence?"
Caretaker conventions before a general election stipulate government grants or donations be distributed by public servants.
A spokeswoman for Mr Barnett said "caretaker conventions do not apply in a by-election".