White House Counsel Greg Craig reminded Obama staff members that ethics rules restrict them from attending free events hosted by private sponsors on the same day The Washington Post canceled plans to hold a lavish dinner at the publisher's home.

The event, planned for July 21, caused an uproar in the company's newsroom and drew fire from other quarters because the newspaper would have charged guests as much as $250,000 for access to top officials in Washington. 

In a memo sent Thursday and obtained by FOX News, Greg directed staff members to an online form to seek approval for such invitations and included a copy of the original White House policy on personal gifts.

Click here to view the policy.

"Many of you are invited to attend such banquets, conferences and cocktail receptions," he wrote, adding that the online form would help streamline the process for approval. "Our hope is that this will make it easier for you to submit such requests and will enable us to serve you better."

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Politico first reported Thursday on the dinner, saying the newspaper had circulated a flier offering lobbyists and organization executives a chance to meet with Beltway insiders at the home of publisher Katharine Wemouth for an "off-the-record dinner and discussion."

The flier called the discussion an "exclusive opportunity to participate in the health care reform debate among the select few who will actually get it done.

The "few" included Obama administration officials, congressional leaders and Post reporters and editors. The fee was $25,000 per "sponsor," and $250,000 for an annual sponsorship.

But Post editorial executives apparently did not know about the dinner, and immediately canceled it.

"The flier circulated this morning came out of a business division for conferences and events, and the newsroom was unaware of such communication," Post spokesperson Kris Coratti told FOX News. "It went out before it was properly vetted, and completely misrepresented what the company's visions for these dinners were, which were meant to be independent, policy-oriented events for newsmakers."

Coratti said the newsroom would "never participate" in such a dinner.

The newspaper's ombudsman, Andrew Alexander, called the nixed plan a "public relations disaster" in an online column Thursday afternoon.

White House spokesman Robert Gibbs said Thursday he didn't believe anyone in the Obama administration accepted invitations.

"Obviously, the counsel would have to review an invitation like this," he told reporters. "And I think the salon that the Washington Post is offering would likely exceed what the counsel would feel in this case would be appropriate."

The White House policy on personal gifts, dated March 20, says staff members can accept free invitations to events "so long as it is not offered by or received from a federally-registered lobbyist or lobbying organization. But the policy added that a supervisor "in consultation" with the counsel's office must first determine whether the staff member's attendance "is in the interests of the White House."

Click here to the read the Politico story.