The chief executive of a charity whose government funding has been withheld over concerns about its ability to manage itself is to step down.
Kids Company had been told by government officials it would not get £3m of funding unless its leader Camila Batmanghelidjh was replaced.
The charity said it will appoint a new chief executive because of "unprecedented financial strain".
Ms Batmanghelidjh will take up a new advocacy and clinical role.
She denied claims the charity had been mismanaged and that this had led to government pressure for a restructure, insisting such claims were a "red herring" to distract from the government's child protection failings.
Downing Street denied claims it had briefed against Ms Batmanghelidjh and said David Cameron believed the charity still had a role to play helping to "give every child the best start in life".
But the prime minister's spokesman said the Cabinet Office had requested changes to the Kids Company management structure "to ensure that their work is put on a sustainable footing".
'Always the plan'
Ms Batmanghelidjh told BBC Radio 4's Today programme she had always planned to step down in her 20th year in 2016.
The charity, which started in south London and supports deprived young people and their families, is one of the most high-profile in Britain and regularly hosts leading politicians.
It is synonymous with its charismatic leader and founder Ms Batmanghelidjh.
It relies heavily on public funding; in the last set of published accounts, for 2013, the government provided £4m, about one fifth of its annual £20m funding.
Officials reported that Justice Secretary Michael Gove and Oliver Letwin, minister without portfolio, supported a tougher approach to the charity.
Who is Camila Batmanghelidjh?
- Camila Batmanghelidjh was born into a wealthy family in Iran. She arrived in England aged 12 and started at the private Sherborne Girls School speaking little English.
- Despite being two months premature and having severe dyslexia, she gained a first class degree from Warwick University and then trained as a psychotherapist in London.
- She is said to have decided at the age of nine that she would devote her life to helping disadvantaged children but never had any of her own.
- She founded Kids Company in 1996 and has been its chief executive for 19 years.
- The charity has branches in London, Bristol and Liverpool, aiming to provide practical, emotional and educational support to some of the most deprived and and vulnerable inner-city children.
- Her ground-breaking work with children facing extreme challenges in their daily lives has won her an array of accolades and awards, including a CBE and a series of honorary degrees and fellowships from universities including UCL and the Open University.
- She was listed among the UK's most powerful women by BBC Radio 4's Woman's Hour in 2013.
- When she appeared as a castaway on Radio 4's Desert Island Discs in 2006, she was billed as someone who had "devoted her life to the kind of children most people would cross the street to avoid".
- She chose Bob Marley's Redemption Song as her favourite track and opted for a yoyo as her luxury while marooned on the hypothetical island.
But Ms Batmanghelidjh said the government was trying to "discredit" her to distract attention from the fact that it was not protecting children "robustly" enough.
She said the charity had been audited during the last 19 years, and evaluated by the London School of Economics, and had always been "absolutely impeccable and clear".
She told the BBC's Victoria Derbyshire programme the charity had held "uncomfortable discussions" with the government about child protection, adding "they can get rid of me but it doesn't get rid of the problem".
Asked about claims she handed cash out to children, she said young people needed money for bus fares and the school canteen.
"Middle class parents give their children pocket money, why does it become a problem when it's a poor child that's being given money?" she added.
Labour's acting leader Harriet Harman said the government needed to maintain its pre-election funding promise to Kids Company, which is based in her Camberwell and Peckham constituency, and angrily defended Ms Batmanghelidjh, saying she was a "charismatic, inspirational leader".
Speaking on the BBC Radio 4's World at One programme, Ms Harman said: "They're doing a very good job. It's not lavish down there. It's not spa treatments, it's not like as if the staff are lavishly well paid.
"It's a pretty hand-to-mouth organisation dealing with very needy children and it just... What I find so exasperating is the idea of people whose lives are very well ordered, who get good salaries can judge and say 'oh well they need to stop growing'. The demand is out there."
Asked if it was the government's duty to ensure public money was being properly spent, she pointed out that the Charity Commission looked at a complaint but decided it did not warrant a full investigation.
Ms Harman last month wrote a letter to Chancellor George Osborne asking "urgent financial assistance" for the charity.
In a statement, the charity said: "In partnership with a City-based group of philanthropists, the charity is being supported by the new government to create a more sustainable organisation and funding structure that will be better able to tolerate unpredictable income streams in the future.
"Camila Batmanghelidjh, the founder and chief executive of Kids Company will not be leaving the organisation and will assume an advocacy and clinical role after the appointment of a new chief executive."
It added "core services" would still be delivered though it would be "reducing its staff levels".
The government has repeatedly resisted attempts by Newsnight and BuzzFeed to use the Freedom of Information Act to obtain correspondence between the prime minister and either Ms Batmanghelidjh or the charity's chairman, Alan Yentob, the BBC broadcaster and executive.
A Cabinet Office spokeswoman said: "Making sure that every child has the best start in life is our top priority, so we will continue to work with Kids Company to ensure its important work is sustainable."