GOVERNMENT money could be pulled from Oxfam following a scandal over staff misconduct, the international development secretary has warned.  

Penny Mordaunt said the charity had ‘betrayed’ the people it was meant to help when it covered up wrongdoing, including allegations of staff’s use of underage prostitutes following the Haitian earthquake in 2010.  

The Oxford-based charity allowed three men to resign and sacked four others for gross misconduct following investigations, according to the Times.

They were in the country’s capital Port-au-Prince in 2010 after a huge earthquake which killed 220,000 people and left a further 1.5m homeless.

Speaking on BBC One’s Andrew Marr Show this morning, Ms Mordaunt said she had only learned of the allegations against the charity when the Times reported them on Friday – and that she will hold urgent crunch talks with Oxfam’s management tomorrow.

She said: “It’s a complete betrayal, both of the people Oxfam were there to help and also the people who were sent there to do that job – it’s a scandal.

“If that organisation does not have the moral leadership to do the right thing and where they have evidence of criminal activity, to pass that information onto the relevant authorities, including prosecuting authorities, that's an absolute absence of leadership.”

Asked by Andrew Marr whether she felt Oxfam’s managers had failed in moral leadership, Ms Mordaunt said: “Yes, I do.”

She added: "They did absolutely the wrong thing. They let individuals who had undertaken criminal activity go, they did not tell prosecuting authorities; they did not tell their regulator and they did not tell their donors.

“If they do not hand over all the information they have from their investigations to the relevant authorities...then I cannot work with them.”

This afternoon Oxfam GB's chairwoman of trustees, Caroline Thomson, said it would tighten up its procedures to 'strengthen the prevention and handling of' sex abuse cases. 

She said: "I share the anger and shame that behaviour like that highlighted in Haiti in 2011 happened in our organisation. It is clear that such behaviour is completely outside our values and should never be tolerated.

"Oxfam prides itself of being a transparent organisation that works to make life better for poor and vulnerable people, an organisation that puts women at the heart of everything we do.

"In the words of our Chief Executive Mark Goldring, we are ashamed of what happened. We apologise unreservedly. We have made big improvements since 2011 and today I commit that we will improve further."