David Cameron has defended the Government's decision to grant £3 million to Kids Company, insisting it was right to give the charity "one last chance".
The Prime Minister said the funds were offered in an attempt to restructure the charity to ensure it continued providing its "excellent" work.
He said: "Sadly that didn't happen, not least because of the allegations that were made and private donors withdrawing their money.
"But I think the Government was right to say let's have one last go at trying to keep this charity going given the excellent work it has done for so many young people."
Mr Cameron added the most important thing was to ensure the children helped by Kids Company are now looked after.