By Mabvuto Banda

LILONGWE, March 25 (Reuters) - The Global Fund has cancelled $574 million in grants to Malawi for fighting AIDS and asked for a $6.4 million refund over allegations of financial mismanagement, the health minister said on Wednesday.

Jean Kalilani said the Global Fund asked for the refund after the ministry of health and the National Aids Commission (NAC) allegedly bought vehicles that were not budgeted for.

NAC is a public trust meant to spearhead a national response to HIV/Aids, a pandemic which has wiped out an entire generation of adults in Malawi and left over a million children orphaned.

"The Fund has asked us to repay $6.4 million for buying vehicles which were not budgeted for and they have also pulled the plug on $574 million funding for the next two years because of allegations of financial mismanagement and political abuse," Kalilani told Reuters.

The minister said the Global Fund now plans to channel the funding through other organisations, rather than the NAC.

The Global Fund's Malawi representative was not immediately available to comment.

Rights activists early this year staged countrywide protests and petitioned the Global Fund to stop funding NAC after it gave a total of $33,000 to organisations with close links to the president and his wife.

"This is what started everything, clearly NAC was diverting funds meant for putting people on anti-retroviral drugs and giving it out to political organisations who have nothing to do with core-anti Aids activities," said Gift Trapence, a leading rights activist.

Kalilani said the Global Fund was being misled by "unpatriotic Malawians".

Greater access to free medicine, backed by money from The Global Fund, has helped slash AIDS-related deaths in Malawi where HIV/Aids had been blamed for 59 percent of deaths among those aged between 15 to 59 years in the country of 13 million, officials say.

Malawi, which depends on foreign aid for about 40 percent of its national budget, has suffered after donors withheld funding over a large-scale corruption scandal in 2013.

(Editing by James Macharia)

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