Image copyright PA Image caption Penny Lawrence says she took "full responsibility" for the behaviour of staff in Chad and Haiti

Oxfam's deputy chief executive has resigned over the handling of a sex scandal involving aid workers.

The British charity is accused of concealing the findings of an inquiry into claims staff used prostitutes while delivering aid in Haiti in 2011.

Penny Lawrence said she was "ashamed" and takes full responsibility.

The Charity Commission has launched a statutory inquiry into Oxfam - which denies a cover-up - but details of its scope have not yet been released.

The watchdog says it has concerns the charity may not have "fully and frankly" disclosed everything it knew about the claims despite previous assurances from Oxfam.

Michelle Russell, director of investigations at the commission, said if details had been known it would have dealt with the situation "very differently".

Media playback is unsupported on your device Media caption Former Oxfam employee Widza Bryant: "I was told my many locals there were... sexual relations"

It comes after an earlier meeting with the International Development Secretary in an effort to protect Oxfam's funding from being cut.

Ms Lawrence joined Oxfam GB in 2006 as international programmes director, leading teams across 60 countries, according to the charity's website.

"Concerns were raised about the behaviour of staff in Chad as well as Haiti that we failed to adequately act upon," she said in a statement.

"It is now clear that these allegations - involving the use of prostitutes and which related to the behaviour of both the country director and members of his team in Chad - were raised before he moved to Haiti."

Analysis: Reputations are on the line

By BBC diplomatic correspondent James Landale

A statutory inquiry is the most serious action the Charity Commission can take.

It gives the regulator new powers to investigate, demand information, suspend trustees and even freeze bank accounts.

So this shows how seriously the Commission is taking the sexual misconduct claims about Oxfam staff in Haiti. It also shows how unhappy the Commission is at not being given the full facts about what went on.

International Development Secretary Penny Mordaunt is being equally tough on Oxfam, threatening to withdraw funding unless it gets its house in order and shows some moral leadership.

But like the Charity Commission, Ms Mordaunt is also keen to show that she is acting, by promising a new unit in her department to establish a global register of aid workers that might be able to stop predatory individuals being re-employed by charities.

She knows she will face tough questioning from MPs on the international development committee next week about what her department knew and what she has done since.

Reputations are on the line here and no organisation wants to be found wanting.

The allegations emerged in The Times on Friday, which said Oxfam's country director for Haiti, Roland van Hauwermeiren, used prostitutes at a villa rented for him by Oxfam in the aftermath of the 2010 earthquake.

According to the paper, Oxfam knew about concerns over the conduct of Mr van Hauwermeiren and another man when they worked in Chad before they were given senior roles in Haiti.

Oxfam said allegations that underage girls may have been involved were unproven.

BBC world affairs correspondent Will Grant said senior government sources feared the abuse allegations could be "the tip of the iceberg" and that all aid agencies operating in Haiti as well as Oxfam would be investigated.

He added locals expressed "real anger" at what they say is impunity by international aid agencies for the way they have behaved.

Widza Bryant, who worked in HR for Oxfam in Haiti from 2009 for three years, said she shared "ongoing rumours" about locals being exploited with management "on many occasions".

She told BBC News: "There were a lot of rumours on the ground about management and leaders exploiting the locals sexually and in other ways to get jobs and to have good standing."

Media playback is unsupported on your device Media caption Oxfam Chief Executive: "We apologise to the British public and the Haitian public"

Mark Goldring, chief executive of Oxfam GB, admitted the charity had failed to act on complaints highlighting the failure to allow Mr van Hauwermeiren to move onto another post after allegations were revealed.

He said the use of prostitutes was "not explicitly contrary" to Oxfam's code of conduct at the time, but bringing Oxfam into disrepute in any way and abusing people who may have been beneficiaries was.

Mr Goldring added: "There was an exploration of how should the organisation respond but we didn't act on it."

Funding risk

The European Commission has said it expects full clarity and maximum transparency from Oxfam, adding that it is ready to "cease funding any partner not living up to high ethical standards".

The charity's programme in Haiti received €1.7m in EU funds in 2011.

International Development Secretary Penny Mordaunt said Oxfam had apologised for its "appalling" behaviour and that the government had not been told at the time the allegations involved sexual misconduct or beneficiaries.

Oxfam has been told to tell the Department for International Development by the end of the week how it will handle any future allegations around safeguarding or it faces losing government funding.

Ms Mordaunt also called for clearer whistle-blowing policies across the charitable sector and launched an urgent review into safeguarding and aid providers.

The Innocent drinks company - one of Oxfam's corporate sponsors which donates around £100,000 per year- said it wants to see a clear plan "for how this could not ever happen again".

The charity has since postponed a "Fashion Fighting Poverty" event, which had been due to take place as part of London Fashion Week on Thursday, saying it was not the "right time" at present.

Media playback is unsupported on your device Media caption BBC world affairs correspondent Will Grant says locals believe aid agencies have enjoyed "impunity"

Oxfam's own investigation in 2011 led to four people being sacked and three others resigning, including Mr van Hauwermeiren.

It produced a public report, which said "serious misconduct" had taken place in Haiti - but did not give details of the allegations.

Oxfam has faced growing criticism of the way it handled the allegations of misconduct by its staff in Haiti, where they were working in the aftermath of the huge earthquake that devastated the country in 2010.

Haiti's ambassador in London Bocchit Edmond called the revelations "shocking", "shameful", and "unacceptable".

On Sunday, Ms Mordaunt told the BBC's Andrew Marr the charity did "absolutely the wrong thing" by not reporting details of the allegations and that no organisation could be a government partner if it did not "have the moral leadership to do the right thing".

Ahead of the government meeting, Oxfam announced new measures for handling of sexual abuse cases, saying it would introduce tougher vetting of staff and mandatory safeguarding training for new recruits.

Oxfam's chairman of trustees, Caroline Thomson, said the charity's board had appointed a consultant earlier this year to review its culture and working practices, which would now be extended.

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