Prince's health charity closes after fraud inquiry

The Prince of Wales's campaign to promote the use of complementary therapies on the NHS came to an abrupt end yesterday with the closure of the organisation he established to advance them.

The trustees of the Prince's Foundation for Integrated Health announced yesterday that the organisation was closing after 17 years with immediate effect. The six remaining employees are to lose their jobs.

In a statement, the trustees blamed the closure on a fraud at the charity, involving hundreds of thousands of pounds. Last Monday a former senior Foundation official was arrested on suspicion of fraud and money laundering. The arrest followed a police investigation into the disappearance of £300,000.

The Prince has been an ardent supporter of complementary medicine for more than 30 years. He set up the foundation in 1993 with the aim of raising the profile of alternative medicine within the NHS. It was funded by profits from the Prince's commercial ventures, including the Duchy Originals organic food company and the shop on his Highgrove estate in Gloucestershire, and received nearly £1m in grants from the Government.

However, it was never far from controversy. Critics have accused the Prince of peddling "mumbo jumbo" medicine and outright quackery. In 2006 a group of 13 leading scientists wrote to all 476 NHS trusts calling for an end to free complementary medicine on the NHS. The group was sharply critical of a guide to complementary therapy produced by the foundation and of the Smallwood report, commissioned by the Prince in 2005, which suggested that wider use of therapies such as homeopathy could save the NHS money.

More recently the Prince came under attack from Edzard Ernst, professor of complementary medicine at the University of Exeter and a persistent critic of the foundation, who warned that the Duchy Herbals Detox Tincture – a food supplement, combining artichoke and dandelion, which promised to rid the body of toxins while aiding digestion – was based on notions which were "implausible, unproven and dangerous".

Professor Ernst said: "It is implied that we can all over-indulge a bit and put it all right with detox tincture. It is encouragement of an unhealthy lifestyle. All the people I have talked to see it in the sense that you can get rid of your own bad habits in that way."

The missing cash was discovered after the charity's auditors questioned some transactions in the 2008-09 accounts. The charity missed the deadline for filing the required documents to Companies House and had already incurred a £750 fine over the delay.

It is understood that the trustees saw no option but to close because of the financial hole in the accounts. "It was a very significant amount of money for a small charity. We could not continue," a source said.

The trustees said the closure had been "planned for many months" but had been brought forward as a result of the fraud investigation. They added that the main task of the foundation had been achieved, with an acceptance by the Government of the need for regulation of the main therapies. However, no date for closure had been set.

The statement said: "On 1 April 2010, the Secretary of State for Health announced plans to introduce statutory regulation for herbalists and to consider the equivalent for acupuncture. The trustees believe that the best way of promoting integrated healthcare in the future is through the networks of specialist practitioners which the charity has helped to establish."

Last night a Clarence House spokesman said: "The Prince of Wales is proud of the achievements of his foundation, which has brought together hundreds of advocates of integrated health who can work more closely together to meet patients' needs."