Oxfam has said it will stop bids for Government funding until ministers are satisfied it can meet the “high standards” they expect.
The charity received £176m in government support last year.
International Development Secretary Penny Mordaunt said on Friday: “Oxfam has agreed to withdraw from bidding for any new UK Government funding until [the Department for International Development] is satisfied that they can meet the high standards we expect of our partners.”
An Oxfam spokesperson said in a statement to HuffPost UK: “Given the public concern about this week’s revelations, we felt it right not to bid for any new UK government contracts at present.
“We appreciate the support of DfID and other donors that enables us to deliver life changing work in countries from Bangladesh to Yemen.
“We are committed to proving that we deserve the confidence of the UK public.”
The latest development came after The Times newspaper reported allegations last week that Oxfam workers had used prostitutes in Haiti after the devastating earthquake there in 2010, some of whom, the paper claimed, may have been underage.
The scandal worsened as it was revealed allegations of similar behaviour had been made in other countries where Oxfam provided aid. The charity was later forced to admit it quickly re-hired one of those dismissed over allegations.
Government ministers have been outraged by the reports, with Mordaunt saying on Wednesday: “This week, horrifying allegations have come to light about the actions of some Oxfam staff in Haiti in 2011.”
She added: “I know that everyone here today, and decent people across the international development sector, share my disgust at these appalling violations.
“And [they] share my determination to lead a full, comprehensive and systematic response to them.
“The sexual exploitation of vulnerable people, vulnerable children, is never acceptable. But when it is perpetrated by people in positions of power, people we entrust to help and protect, it rightly sickens and disgusts. And compels us to take action.”
Meanwhile, the Charity Commission watchdog has launched a full inquiry into the allegations against Oxfam.
“The UK will continue to take all necessary action and it is vital now that the whole aid sector – from UK-based charities working overseas, to the UN, to other donor countries – step up and demonstrate the leadership required,” Mordaunt added on Friday.
‘We’ve been savaged’
The news came as the charity’s under-fire chief executive spoke out on Friday after “six sleepless nights”.
“People are gunning for Oxfam,” Mark Goldring told the Guardian’s Decca Aitkenhead.
“Anything we say is being manipulated. We’ve been savaged,” he added.
Earlier this week, Penny Lawrence, Oxfam’s deputy chief executive, stood down over the scandal, saying: “I am ashamed that this happened on my watch and I take full responsibility.”
Lawrence was international programmes director at the time of the alleged incidents.
HuffPost earlier reported on lax criminal record checks in Oxfam’s UK shops.
The absence of proper checks into volunteers’ criminal pasts was exposed after the charity’s former head of safeguarding said there had been three child abuse accusations in stores within a single month in 2015.
Oxfam then admitted 52 incidents occurred in shops last year alone.
The charity said it has now set up an independent commission to review all allegations.