If you arn't comfortable having your dog use his paws, then no, I wouldn't allow it. I allow pretty much anything with tug mostly because I had to actually use a clicker to shape Zuma's tug. Now she's a nut about tug but because it's HER reward it has to be fun for her. However, I have to enjoy it enough to use it as often as we do as a reward in agility and I can tell you that I wouldn't enjoy getting injured every game of tug.
Zinga, Edgar, Zip Tie, Skill, Taboo, Mighty Mouse, Famous, Zuma