Kids Company's Camila Batmanghelidjh pressured to leave

The charity, which relies heavily on public funding, was allegedly told by Government officials it would not receive £3m in funding unless she was replaced.

The Government reportedly has concerns over mismanagement of funds at the charity.

The prime minister's spokesman told the BBC that the Cabinet Office had requested changes to the charity's management structure "to ensure that their work is put on a sustainable footing".

Ms Batmanghelidjh has denied that the charity has been mismanaged, telling BBC Radio 4’s Today programme that the claims are a ‘red herring’ to avoid the ‘real issues’.

She said, ‘This is briefing to avoid the real issues. I’ve repeatedly challenged various governments on the fact that they’re not protecting children robustly.’

The announcement follows a joint investigation by BBC Newsnight and Buzzfeed, which alleged that the Cabinet Office said it would hold onto the money unless Batmanghelidjh stepped aside. 

In a Nursery World comment piece last month, Camila Batmanghelidjh called for a 'revolution in caring for vunlerable children.'

She said, 'Unless we have an absolute theoretical revolution in the way we care for vulnerable children, we will continue not only to fail them but also to impact negatively the development of the next generation.'

According to Ms Batmanghelidjh, the charity has been evaluated by the London School of Economics over its management, the way it functions, and its value for money.

Ms Batmanghelidjh said she always planned to stand down in her 20^th year in 2016. She will now assume an advocacy and clinical role after the charity, which supports deprived children and their families, appoints a new chief executive.

Writing on Twitter, acting leader of the Labour party Harriet Harman said the Government must keep its pre-election funding pledge to Kids Company.

She tweeted, ‘Hundreds of young people need Kids Company. Government must keep pre-election funding pledge.’

In another tweet she said, ‘ [The] Government shouldn’t punish Kids Company because Camilla rightly speaks up about the need for more support for children and young people.

In a statement issued by Kids Company, Alan Yentob, chair of the board of trustees and, separately, creative director of the BBC, said, ‘Camila Batmanghelidjh and the staff of Kids Company have created a highly effective model of care and support for the most vulnerable children in society which should be recognised and valued as a national asset. The board and I, with the backing of a philanthropic group have ensured that this is protected and that Kids Company will continue to offer safety, protection and loving care to some of society’s most vulnerable children.’

A Cabinet Office spokesperson said, ‘Making sure that every child has the best start in life is our top priority, so we will continue to work with Kids Company to ensure its important work is sustainable.'

Camilla Batmanghelidjh founded Kids Company in 1996.

The charity has branches in London, Bristol and Liverpool, providing practical, emotional and educational support to vunlerable inner-city children.