Unicef is to accept the £1.5m the holiday company Thomas Cook said it would donate to the charity.
The company received the money as compensation from the hotel owner after Bobby and Christi Shepherd died from carbon monoxide poisoning while their family were on holiday in 2006 at a Corfu hotel promoted by Thomas Cook.
The company sparked anger with its decision, announced yesterday, to give the money to charity rather than to the parents of the children, Neil Shepherd and Sharon Wood.
At an inquest held last week, Thomas Cook was found to have breached its duty of care.
It emerged that in 2013 and 2014 Thomas Cook received £1.5m in compensation in two tranches from the hotel owner, Louis Group, after suing the company for breach of contract. The total award was £3m, but half of this was paid out to Thomas Cook’s insurer, which has not been named.
"Thomas Cook has not in any way profited from our claim against the hotel owner," Peter Fankhauser, group chief executive at Thomas Cook, said in a statement yesterday. "I have made arrangements for the full amount – £1.5m – to be donated to Unicef, the world’s leading children’s organisation.
"I believe this is the right thing to do and I apologise to the family for all they have gone through."
A spokeswoman for Unicef told Third Sector that the children’s charity would be using the money for its work in helping to keep vulnerable children safe around the world.
"This is a tragic case and we offer our sympathies to the family of Christianne and Robert Shepherd," she said. "We asked that Thomas Cook inform the family before the donation was made and we were given that assurance."
Shepherd and Wood received about £350,000 each after a seven-year legal battle against the Louis Group.
Comments on Twitter over the past 24 hours include: "Thomas Cook gave 1.5mil to charity, should have gone to the parents of the poor lost children, #BoycottThomasCook they are a disgrace" and "A big ‘screw you’ to Thomas Cook. Talk about a PR disaster. Trying to look all holy by giving money to Unicef now that they've been found out."