OXFAM’S handling of sex allegations has been condemned by the Government – with a threat that millions of pounds of taxpayer funding could be cut off.

The Oxford-based charity has faced intense criticism over its handling of allegations, including the use of prostitutes by workers in Haiti in 2011.

International Development Secretary Penny Mordaunt said the charity had failed to show ‘moral leadership’ and had not properly informed donors, regulators and prosecutors about the actions of its workers.

The charity received £31.7m in taxpayer funding in 2016/17, but Ms Mordaunt indicated future support could be at risk.

During a speech to an aid conference in Stockholm, she said: “No organisation is too big, or our work with them too complex, for me to hesitate to remove funding from them if we cannot trust them to put the beneficiaries of aid first.”

She said she would be meeting the National Crime Agency on Thursday after talks with charity bosses, regulators and experts in recent days.

Meanwhile, Hollywood star Minnie Driver has become the first celebrity to quit as an Oxfam ambassador, describing her response as ‘devastated’.

She had worked with the charity for 20 years.

Oxfam, which is subject to a Charity Commission inquiry has issued an 'unreserved apology' to the Government, donors, supporters and the people of Haiti.