An inquiry into the allegations, made by 10 members of parliament, is being conducted by Ragaa el-Arabi, the country's general prosecutor.
The organisation, in Minufiya in the Nile delta, is accused of systematically killing children under the age of 13. The parliamentarians, who are from the same region, said their suspicions were aroused when 25 out of 32 children at the home died in the space of three months.
The Ministry of Social Affairs said a previous investigationfound the deaths were due to "gross negligence" and there was evidence of financial and administrative irregularities.
But the MPs claim the orphans were killed for profit, "with large sums of money involved and with the knowledge and collaboration of certain powerful figures". The organs of the children, they say, are on sale for up to $30,000 (pounds 19,000).
The accusations come amid political conflict over organ transplants. At present such operations, with the exception of those involving corneas, are banned. Legislation is due to be introduced soon to remove most restrictions and opponents of the reform fear it will lead to widespread abuse. They cite past cases of donors being exploited to provide transplants in Egypt for wealthy Gulf Arabs.
An official at the Interior Ministry in Cairo said: "They [the MPs] are saying there is corruption and the killings are taking place with the knowledge of important people and nothing is being done because these children are poor. The problem is there is not much regulation of these welfare organisations."
There have been reports in the past about alleged black-market trading in organs in other countries. A recent investigation said that 800 children vanished in 12 months in Honduras, central America, with the suspicion that they had been killed for transplants.
The Chinese have also been accused of trading in body parts of executed prisoners. Last year a prominent dissident, Harry Wu, presented United States congressmen with photographs which he said proved prisoners were routinely cut up by doctors after being shot.
In New York last year, the Federal Bureau of Investigation arrested two Chinese nationals, one a former state prosecutor, who were attempting to arrange a "guaranteed" supply of 50 kidneys a year.Reuse content