GOVERNMENT money could be pulled from Oxfam following a scandal over staff misconduct, the worldwide development secretary has warned.
In a further warning to the charity, she told the BBC: "If they do not hand over all the information they have from their investigation and subsequently to the relevant authorities, including the Charity Commission and prosecuting authorities, then I can not work with them any more as an aid delivery partner".
In a statement on Friday, Oxfam neither confirmed nor denied The Times newspaper report but said its misconduct findings had "related to offenses including bullying, harassment, intimidation and failure to protect staff as well as sexual misconduct".
Former Oxfam staff in Chad told the paper that "women believed to be prostitutes were repeatedly invited to the Oxfam team house there", and a senior staff member was sacked for his behaviour in 2006.
Oxfam said it was "dismayed by what happened" and would fully cooperate with authorities.
The Department for International Development (DFID) said the UK-based charity's leaders had "showed a lack of judgement" in investigating the matter and in its openness with the government and Britain's Charity Commission regulator.
Speaking about the allegations, she said: "I think it's a complete betrayal of both the people Oxfam were there to help and also the people that sent them there to do that job".
He added: 'Everybody - the 25,000 staff and volunteers - are compromised by this, the hundreds of thousands of people who support Oxfam every month are compromised by this, and to everybody I apologise.
Oxfam said it publicly announced an investigation into the allegations when they surfaced and kept the Charity Commission informed. He continued that, "because of that the department did not escalate it to ministers, they did not tell and I was never aware of it".
"Moreover we received positive references from former Oxfam staff-in their individual capacities-who worked with him", including from a human resources staffer, a spokesman said.
"There has been in my view, not just a cover-up with Oxfam, there is a denial, a culture of denial in the aid sector about the exploitation and sexual abuse that has taken place historically for decades", she said.
The charity said allegations that under-age girls may have been involved were not proven.
Roland van Hauwermeiren, 68, whom Oxfam said was forced to resign as Haiti country director in 2011 after allegedly admitting hiring prostitutes, went on to become head of mission for Action Against Hunger in Bangladesh from 2012 to 2014.
Oxfam has denied allegations that it tried to hide that some of its staff paid prostitutes in the aftermath of the quake.