International aid group won't apply for government funding until probe into governance is complete

Save the Children is set to lose tens of millions of pounds after it announced it will not apply for government funds until a sexual harassment investigation is complete.

Kevin Watkins, the charity’s chief executive, made the announcement as he faced calls for his resignation.

It comes as the Charity Commission began its inquiry into Save the Children after it revealed evidence of "unsafe behaviour" towards staff in 2012 and 2015.

The charity has been accused of failing to deal with claims of inappropriate behaviour towards female employees by staff including its former chief executive, Justin Forsyth.

Watkins said: “In light of the Charity Commission investigation I took the decision it was right and proper for us to voluntarily offer a moratorium on new bids.

“I’m heartbroken we have to scale back our work when we could be helping some of the world’s poorest children.”

International development secretary Penny Mordaunt said she accepted the organisation's decision.

"I expect every organisation that we work with to have rigorous reporting and complaints mechanisms," she said.

Save the Children's international chairman Alan Parker resigned last week.

In his resignation letter he wrote: "There is an urgent and pressing need to rebuild trust and confidence."

"If we do not, some of the world's poorest and most vulnerable children will suffer."

Last year the charity received £139 million from the Department for International Development (Dfid) out of its overall income of £407 million. It is the largest British recipient of Dfid funding.

Ongoing DfID-funded programmes are not affected by the move, according to the charity, which said it reached 56 million children directly last year.

In the wake of the aid sector sex scandal, which started after it was revealed Oxfam staff in Haiti organised sex perties with prostitutes, Oxfam agreed it would stop bidding for government cash.