KIDS Company hit back yesterday at suggestions that the charity had handed out hundreds of pounds in payments to vulnerable young people “willy-nilly.”

The organisation closed its doors earlier this year amid claims of financial mismanagement, less than a week after receiving a £3 million government grant.

The allegations are strenuously denied by the charity’s founder Camila Batmanghelidjh and chairman of trustees Alan Yentob.

Giving evidence to the Commons public administration and constitutional affairs committee yesterday, Ms Batmanghelidjh said that all the payments made to the charity’s clients had been properly accounted for.

“It has turned into the notion that it was handed out willy-nilly. It wasn’t. It was accounted for,” Ms Batmanghelidjh said.

She explained that “poverty intervention payments” were made to cover food vouchers, bus passes and emergency grants.

Payments over £100 a week were “very rare,” she said, and would only be made if a client had a family to support.