Kids Company a political football - Camila Batmanghelidjh
Kids Company has become "a football for the media and the civil servants", the charity's founder has said.
Camila Batmanghelidjh said some people in government wanted the charity to "disappear" and there had been a "malicious discrediting campaign".
Kids Company closed on Wednesday after ministers said they wanted to recover a £3m grant given to the charity.
The Cabinet Office said it believed conditions attached to the use of the money had not been met.
Concerns have previously been raised by government officials about the financial management of the charity, which started in south London and supported deprived young people and their families.
The government and other charities and councils in affected areas are drawing up plans to provide support for children following the closure.
'Trial by media'
The BBC's assistant political editor Norman Smith said that challenge had been made more difficult by the speed of the closure and the large number of people it worked with.
He said the reports and documents that Kids Company had about those it worked with had been put in safe keeping until a receiver was appointed to sell the charity's assets.
But Ms Batmanghelidjh told BBC Radio 4's Today programme Kids Company had been subjected to a "trial by media" based on "rumours and conjectures".
She said reasons for the charity closing included:
- It was dealing with too many serious child protection cases that should have been dealt with by government
- Not enough funding was given to deal with the number of young people the charity supported
- Individuals within the government wanted the charity to "disappear" - partly because Ms Batmanghelidjh was "outspoken" and highlighted child protection problems
- An investigation by the Met Police's sexual offences, exploitation and child abuse command into allegations that details of incidents involving young people who used the charity were not passed to police. She said this led to a donor not giving £3m
But the BBC has since been told the donor at no point withdrew the offer and remained ready to stand by the charity after news of the investigation was disclosed.
What did Kids Company do?
It provided services including counselling, walk-in centres with hot meals and help with housing and healthcare for children and young people whose parents were often unable to care for them.
It had branches in London, Bristol and Liverpool, employed 650 people.
It is also understood the trustees of Kids Company felt it would be wrong to accept any further funds considering the serious issues facing the charity.
Ms Batmanghelidjh said there was "no basis" to the allegation being investigated by police.
Ms Batmanghelidjh said parts of the government supported the charity but others wanted it to "disappear off the patch".
The government released £3m to Kids Company last week after Ms Batmanghelidjh confirmed she would step aside and take on a new advocacy and clinical role.
The grant had been intended for a "transformation and downsizing plan", but the BBC understands £800,000 was used to pay wages.
But Ms Batmanghelidjh said "huge discussions" had taken place with the Cabinet Office before Kids Company decided to use part of the £3m grant to help pay its monthly wage bill.
She said an email was sent by the charity to the Cabinet Office saying the money would be needed for staff wages, but the Cabinet Office did not respond and say the money could not be used in this way.
Asked if Kids Company's finances could have been run better, Ms Batmanghelidjh said it had struggled due to lack of funding rather than mismanagement.
She accepted Kids Company had a "hand to mouth existence", but said it was struggling to cope with the number of children "pouring through our doors".
"It's not about bad management on our part, it's about trying to sort out something that society isn't dealing with," she said.
Alan Yentob, chairman of Kids Company, told Channel 4 News that suggestions of financial mismanagement were "complete rubbish".
Mr Yentob, who is also BBC creative director, said the closure had happened "over the last year or so", adding: "We have had problems raising funds, and the demand has been increasing."
In a letter to Cabinet Office Minister Oliver Letwin, Labour's Lucy Powell asked for the National Audit Office to review the public funding given to Kids Company
The NAO said it was following developments.
I left home at 16. My uncle was abusing me.
I moved in with my partner. His brother was already in touch with Kids Company so I wanted to call them. Within a week of writing to Camila Batmanghelidjh she was hugging me in her office.
I was given a key worker who up until Wednesday evening had been with me.
I got pregnant and social services were involved. My key worker was there at every meeting with them.
Everything was made so clear to me and at the end of the process social services said they had no concerns so my daughter is still with me.
'Money for drugs'
We would queue up. We would sign, put our names down, sign off that we got our money, get a little brown envelope with £30 in it and an Oyster travel card, then we would go to the shop, do whatever with that money, spend it on drugs I suppose.
The Cabinet Office said: "The government has supported Kids Company... to help it deliver services for vulnerable young people and so we are disappointed it has been unable to move to a sustainable financial position.
"The welfare of these young people continues to be our primary concern and we are now working closely with local authorities to make sure they have access to the services they require."
Bristol City Council said drop-in services for young people in the city have reopened, following the closure of Kids Company.