Media playback is unsupported on your device Media caption Secret filming uncovers charity shop's anti-Islamic stock

A military charity found selling Nazi-themed and anti-Islamic merchandise is being investigated by a watchdog.

The founder of 1st Knight Military Charity was secretly filmed selling T-shirts emblazoned with offensive messages at its Blackpool headquarters by a BBC Scotland investigation team.

Andy Linihan also sold badges alluding to the shooting of suicide bombers.

After viewing the footage, the Charity Commission said it had begun its highest level of investigation.

The BBC documentary, The Great Military Charity Scandal, discovered the charity was selling Nazi-themed T-shirts and hooded jumpers, some emblazoned with neo-Nazi emblems.

Image caption The charity was found to be selling Nazi-themed merchandise

Image caption In a statement, the charity said it should not have been selling this type of merchandise

Velcro badges, designed to be placed on uniforms or baseball caps featured a picture of an assault rifle and the words '72 Virgins Express'.

When asked by an undercover journalist what the words meant, Mr Linihan said they referred to the shooting of suicide bombers.

He said: "When they supposedly go up to heaven or wherever they go to, there are 72 virgins waiting for them."

He then put on a woman's voice and is heard saying, `Hello Johnny, I'm here, even though my head's blown off', before erupting into laughter.

A volunteer for the charity, which organises respite trips for veterans suffering post-traumatic stress disorder, then told the BBC investigator: "We shoot them and they get the virgins."

The Charity Commission confirmed it had opened the most serious form of investigation it can undertake into 1st Knight.

A spokesperson said: "The commission has opened a statutory inquiry into 1st Knight Military Charity - registered charity number 1158071.

"The inquiry was opened today in response to regulatory concerns identified from publicised footage of the BBC documentary, 'The Great Military Charity Scandal', in which the charity features, and items shown to the commission by the BBC that were obtained as part of its investigation.

"The trustees of the charity have been notified and the commission will issue a public statement about the inquiry in due course."

Another body, the Fundraising Regulator, which oversees fundraising conduct in the UK, has said it will also investigate concerns about the charity as a result of the BBC investigation.

Mr Linihan said he accepted the items filmed by the BBC were "products which ought not to be sold by the charity".

He added: "As a result of your visit we have withdrawn the products from the shop and removed them from the internet."