Kids Company: Camila Batmanghelidjh's London youth work charity looks set close as financial uncertainty looms

They received a £3 million Government grant a week ago

The Government provided Kids Company with a £3m grant just last week (Getty)

Children's charity Kids Company is reportedly set to shut down operations on Wednesday evening, despite receiving a £3 million Cabinet Office grant last week.

The London-based charity was set up in 1996 by Camila Batmanghelidjh, to provide "practical, emotional and educational support to vulnerable inner-city children, young people and families."But according to reports, the services it provides to children across the capital and beyond will be ground to a halt this week, as the charity's finances come under scrutiny.

In what has been a period of great financial uncertainty for the organisation, which has over 600 paid staff, the Government have been providing funds to support their work. In April 2015, the charity received £4.265 million, with a further £3 million payment being made last week.

It is believed that one condition for receiving this newest payment, which the Government are now looking to recover, was that it not be used for the "day to day" operational running of the charity, which would include restricting the use of the funds to not be used on staff wages, say the BBC.

Conservative party leader David Cameron answers audience questions with Camila Batmanghelidjh, the founder of the charity 'Kids Company' (Getty)

On 30 July, Batmanghelidjh reportedly emailed staff, stating that they would be would be paid the following day, writing: “I just want to let you know that we have just received our funding from the government and are processing payroll right now.”

Officials are currently investigating how much of the tax-payer funded grant will be recoverable, but Kids Company have stated that speculation over was "dangerous and irresponsible".

The Cabinet Office's most senior official, Richard Heaton, wrote to Ministers in June, after being asked to advise the politicians on whether this latest payment should be made. In his response, Mr Heaton, the Permanent Secretary for the Cabinet Office and First Parliamentary Counsel, wrote that he did not feel the multi-million pound grant offered "value for money", and that he had "little confidence" that the charity would see through restructuring plans.

The Ministers called for the payment to go ahead regardless, but conditions were placed on payment, including the need for the charity's high profile director to step aside, as Ms Batmanghelidjh accused politicians of playing "ugly games".

A Cabinet Office spokesperson declined to comment this morning on the reports of impending closure.

This news comes just days after a joint investigation by BuzzFeed News and BBC Newsnight revealed that police are now investigating the charity for allegedly failing to report criminal offences occurring in its centres to the relevant authrorities. A Metropolitan Police statement confirmed that the "Complex Case Team of the Sexual Offences, Exploitation and Child Abuse Command" were investigating the serious allegations.

In recent weeks, local authorities have been preparing plans to support the 36,000 people that Kids Company works with, many of whom are vulnerable, in case the closure was confirmed.

The Independent has approached Kids Company for comment, but are yet to receive a response.