The children’s charity Kids Company closed last night, with its founder and president, Camila Batmanghelidjh, saying its demise had been caused by "rumour-mongering civil servants, ill-spirited ministers and the media".
A statement issued on behalf of the charity’s trustees last night said it had closed because of a lack of funding.
It said the charity, which has 580 staff, had closed is 11 "street level" centres in London and Bristol and its outreach project in Liverpool.
The services had been helping tens of thousands of vulnerable children, young people and families, "many of whom depend on the charity for practical and emotional support", the statement said.
Batmanghelidjh told BBC Radio 4’s Today programme this morning that a philanthropist had withdrawn a £3m donation after hearing of sex abuse allegations, which surfaced last week.
She denied the charity had been badly run and said the reason for its closure was a lack of funds.
She had last night confirmed the closure and said: "A bunch of rumour-mongering civil servants, ill-spirited ministers and the media, on the back of a range of rumours, put the nail in this organisation and shut it."
The trustees’ statement said the charity had found this year that previous levels of funding had not materialised.
It said the charity had planned to restructure to a level that could be supported by a lower turnover and had sought funds from government and a group of philanthropic donors, "but as a result of serious, as-yet unsubstantiated, allegations against the charity it was unable to meet its ongoing liabilities".
The Metropolitan Police last week said that officers from its sexual offences, exploitation and child abuse unit were looking into a number of allegations of crime involving a children’s charity.
Kids Company was founded in 1996 by Batmanghelidjh to provide support for vulnerable inner-city children, young people and families.
The trustees’ statement said: "It is with the greatest sadness and reluctance that we have reached the decision to close Kids Company. We have been forced to do so because collectively, despite the extraordinary efforts of Camila and her team, some truly enlightened philanthropists and the government, we have not been able to continue."
It said that it was a tragedy that the charity had to close and that "this extraordinary work will come to an end leaving many thousands of vulnerable children, young people and families without hope".
Batmanghelidjh said: "Our children, staff, and volunteers, supported by trustees and extraordinarily generous donors, have over the last 19 years helped create an inspirational community committed to recovery and love.
"The catastrophic abandonment of children who are suffering is a testimony to our collective moral failing. I hope one day the childhood maltreatment wound, that is so deeply hurting this country, will heal."
A spokeswoman for the Cabinet Office declined to comment on reports that it was trying to recoup a £3m grant that it gave to the charity last week.
"The government has supported Kids Company over the last seven years to help it deliver services for vulnerable young people and so we are disappointed it has been unable to move to a sustainable financial position," she said in a statement. "The welfare of these young people continues to be our primary concern and we are now working closely with local authorities to make sure they have access to the services they require."
A statement on the charity’s website said that it had contacted the NSPCC, Barnardo’s and other local organisations in the hope that they could help take on Kids Company’s clients.