Comic Relief's chief executive has promised a full review of its investment policy following a public backlash triggered by a Panorama investigation into the charity's multimillion-pound holdings in tobacco, arms and alcohol companies.

Kevin Cahill admitted for the first time on Tuesday that the Red Nose Day and Sport Relief charity still had money in managed funds that held shares in tobacco, arms and alcohol firms but said they were "a small percentage, no more than 5% of our funds in any of those particular areas".

He was speaking after details emerged of Tuesday night's Panorama documentary on BBC1, which reported that between 2007 and 2009, Comic Relief money was put in shares in schemes that critics say contradict the core aims of the charity.

The Panorama investigation had prompted several months of wrangling between the programme-makers and Comic Relief, straining the close working relationship the charity has with the BBC, which has broadcast its Red Nose Day and Sport Relief fundraising telethons for nearly 30 years.

Comic Relief's law firm, Harbottle & Lewis, attempted to get the programme stopped, warning that its accusations would "damage vulnerable people in the UK and abroad".

However, after sustained criticism of Comic Relief on Tuesday, including caustic tweets from some of the charity's own high-profile supporters, including comics Frankie Boyle and Al Murray, Cahill signalled a sudden change of tack.

"We will do a full review of our policy after this particular programme and these discussions we are having now," Cahill told Martha Kearney on Radio 4's World at One.

"It's really important that the public stick with us, that they trust us to do the right thing and they understand that we are listening to the messages that are out there on the social networks."

Cahill said it was a "no-brainer" that the charity would rather invest in ethical concerns if they could match or better the returns offered by other investments.

But he added that Comic Relief and other charities should seek more clarification over the rules around ethical investments from the Charities Commission.

"Our trustees were acting in good faith in doing what they were doing. It's very good to hear the potential exists within ethical funds to match the return [of funds with non-ethical investments], because Comic Relief would clearly choose to be in those if the return was equal or better to where we currently are. It's a no-brainer for us."

Cahill said the charity's trustees had made their investment decisions believing "they delivered the greatest benefits to our benefactors".

"When a moment like this occurs for a charity like ours, that's never had a blemish on its reputation in its entire 25-year history, which has never been cited for any kind of transgression of Charity Commission regulations or guidelines, the past is important but the future is even more important."

Prior to Cahill's announcement, the charity had come under attack from Boyle, whose controversial routine was axed from a BBC3 broadcast of a Comic Relief fund-raising night this year.

Boyle tweeted: "Will happily perform at this year's Comic Relief if paid in guns" and "Those fairy cakes your kids baked for Comic Relief bought [Ugandan warlord] Joseph Kony a rocket launcher", which had been retweeted 2,000 times at the time of publication.

Murray, better known as the Pub Landlord, who appeared in Comic Relief Does Fame Academy on BBC1 in 2005, was also critical on Twitter. Referring to Comic Relief's 1991 single, The Stonk, he pointed out that one definition of a stonk is "a concentrated artillery barrage".

Other key figures connected to Comic Relief defended the charity.

Journalist and broadcaster Emma Freud, wife of Comic Relief co-founder Richard Curtis, replied to a comment on Twitter that said Panorama producers would "have blood on their hands if their ill-judged programme leads to just one person not donating to future Comic Reliefs". Freud responded: "Thank you for that ... I know."

Controversy has surrounded the Panorama documentary, All in a Good Cause, since it was postponed in October, amid claims that a string of executives had ruled themselves out of taking decisions on the programme, as a result of the BBC's longstanding ties with Comic Relief.

The BBC director general, Tony Hall, and its director of news and current affairs, James Harding, became involved, with the latter understood to have asked the producers to go back and firm up the investigation.

Hall told an industry conference last month: "It's James's [Harding's] programme. He wants to get it right. It's quite right the director of news has views about programmes – it'll broadcast."

In a string of letters to the BBC and the programme's production team, Comic Relief's lawyers Harbottle & Lewis said: "We should not have to remind you of the enormous damage your unsubstantiated allegations will cause to our client and its charity aims.

"This is especially so given such claims will damage the vulnerable people in the UK and abroad who our client seeks to help."

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