Camila Batmanghelidjh, the high-profile founder of the children's charity Kids Company, will move to the newly created role of president after claims that a Cabinet Office condition for releasing £3m of funding was that she step down as chief executive.
Over the past 19 years Batmanghelidjh has developed the charity, which provides substitute parental carers for children affected by poverty or maltreatment, from a single site in south London to a body spending more than £20m on charitable activities. Her ability to charm money out of the pockets of individual donors and corporates has accounted for the bulk of its income, and her appeal to Westminster garnered more than £18m of public money between 2010 and the end of 2013.
But the years have also seen an accumulation of questions about how Kids Company spends this money and how well-suited Batmanghelidjh - an Iranian-born, British-educated theatre studies graduate and trained psychotherapist - is to be chief executive of a large organisation.
These came to a head when the Cabinet Office published correspondence showing that ministers decided to award the £3m grant to Kids Company despite warnings from the most senior civil servant in the department that the charity was unlikely to meet the government's conditions for the funding.
As a result, the charity announced that Batmanghelidjh would move to the role of president and "continue to play a central role in the future development of Kids Company while maintaining her clinical work, advocacy and fundraising". The charity said it hoped to have a new chief in place by the end of October and had appointed a specialist to manage a restructure of the organisation.
The Cabinet Office appears to have got what it wanted; Batmanghelidjh, however, fought a strong rearguard action, accusing unnamed people of briefing against her to distract attention from the lack of appropriate help for children.
Batmanghelidjh's network of powerful supporters – including David Cameron, the Prime Minister, and Alan Yentob, the broadcaster and chair of Kids Company – might not have been enough to keep her in post, but they, her media profile and her fundraising ability are assets the average charity chief executive might value enormously.