​In the first case of its kind, the Charity Commission is probing "significant breaches of trust"

Charity Commission officials in England have launched an investigation into a charity trustee who paid herself £31,000.

Wendy Watson, who founded the National Hereditary Breast Cancer Helpline in 1996, has resigned as a trustee after financial irregularities were uncovered by the commission.

Trustees cannot be paid without permission from the regulator.

It was also discovered that charity's accounts show as little as 2.8% of annual donations has been spent on "charitable activities".

Figures from the accounts show that in 2014/15 the charity's total expenses were £909,634 - of which only £27,403, was listed as being spent on "charitable activities", with £874,539 set down as "fundraising expenses and other costs".

The following financial year, total expenses were £947,824, of which £929,975 was spent on charitable activities.

The accounts also show the charity owed Watson £62,000 after she gave the money in an unsecured loan - with trustees approving a repayment of £30,000.

The figures from 2015/16 show her daughter was paid £17,849 in salary and expenses during the year for work as a fundraiser.

Using new powers, it is the first time the regulator had issued an official warning for "significant breaches of trust".

As such it issued an official warning to Watson - the first of its kind.

Watson, of Derbyshire, described the payments as "an error".

The charity was founded after Watson became the first woman in the UK to have a pre-emptive mastectomy.

She was appointed MBE for services to people with breast cancer.

It has raised up to £1 million a year from charity shops in Derbyshire, Yorkshire, Greater Manchester, Humberside and London.

The Charity Commission also raised concerns about the organisation's record keeping and "improperly delegating" management of the charity.

The official warning was issued after points raised in a previous inspection last year were not addressed.

Michelle Russell, Charity Commission's director of investigations, said: "As a trustee, as it says on the tin, you are trusted with other people's money as a volunteer to look after it.

"When we found out there were some unauthorised payments to a trustee, we made it clear that it wasn't allowed to continue.

"But when we went back for the second inspection we found they'd continued to make payments in breach of charity law."

A statement from Watson's lawyers said: "Wendy Watson has worked full-time for the charity from August 2012 until now.

"She was paid for her work for one year (September 2014-5) [and] during that period, she was also a trustee.

"Neither Ms Watson nor the charity were aware that this was inappropriate until they were informed by the Charity Commission, at which point Ms Watson immediately resigned as a trustee and continued to work without payment.

"Ms Watson was also paid for three months' work at the end of 2016.

"Other than these periods, she has worked full-time on a voluntary basis."