The International Development Secretary said she would “not hesitate” to remove Government funding and partnership from any charity, big or small, that failed to impose the highest standards on staff.
“The recent revelations about Oxfam, not solely the actions perpetrated by a number of those staff but the way the organisation responded to those events – should be a wake up call to the sector,” she said in a speech in Stockholm.
Her strong warning to the aid sector followed new revelations that the former charity worker at the centre of sexual exploitation allegations had been investigated for using prostitutes by another charity before he was taken on by Oxfam.
Roland van Hauwermeiren, 68, was employed by Merlin, now part of Save the Children, in Liberia where his behaviour caused concern yet went on to be employed by Oxfam and another charity.
Ms Mordaunt said: “They let perpetrators go, they did not inform donors, their regulator or prosecuting authorities. It was not just the processes and procedures of that organisation that were lacking but moral leadership.
“We cannot end violence against children unless zero tolerance means something.”
She went on: “No organisation is too big or our work with them too complex for me to hesitate to remove funding from them if we cannot trust them to put the beneficiaries of aid first.”
Ms Mordaunt is meeting the National Crime Agency tomorrow and wrote to every charity which received UK demanding improvements. “Unless you report every serious incident or allegation, no matter how damaging to your reputation – we cannot be your partners,” she said.
Oxfam corporate supporters said they were considering how to respond.
A spokesman for Visa said: “We are engaged with Oxfam to understand what steps have been taken to address staff misconduct and ensure alignment with our own standards and values.”
Marks & Spencer, which has run a “Shwopping” partnership with Oxfam since 2008, said the chain is monitoring how the charity is dealing with the situation. “These are very serious allegation,” said a spokeswoman.
Heathrow Airport said in a statement: “We are in touch with the charity and are taking this matter very seriously.”
A spokeswoman for the Co-operative Bank, a partner of Oxfam since 1995, said: “We are monitoring the situation closely.”
Waterstones book chain said: “We listen to, and seek to understand, the assurances given by the Oxfam leadership.”
Oxfam officials are due to meet the Charity Commission on Wednesday.
A commission spokeswoman confirmed a meeting will take place but said she could not give any further details, including location.
The Good Will Hunting star resigned after 20 years with the charity, saying she was “horrified” by the scandal.
In a statement published in an article in the Telegraph then tweeted from her account, she said: “I am nothing short of horrified by the allegations against Oxfam International.
“In no uncertain terms do I plan to continue my support of this organization or its leaders.
“And though it is unfortunate that after 20 years I am no longer able to advocate and defend through this specific framework, social and economic injustice is more globally prevalent than ever.
“I certainly will not let the abhorrent mistakes of a troubling organization stop me or anyone else from working with good people in this space to support a population of human beings around the world that needs our help.”
The 48-year-old later tweeted: “All I can tell you about this awful revelation about Oxfam is that I am devastated. Devastated for the women who were used by people sent there to help them, devastated by the response of an organization that I have been raising awareness for since I was 9 years old £oxfamscandal”
During her time as an Oxfam ambassador, Driver travelled to countries including Cambodia and Thailand to highlight the charity’s work and has also performed at a fundraising concert.
The Charity Commission has now announced it has opened a statutory inquiry into Oxfam and International Development Secretary Penny Mordaunt is due to give a speech on Wednesday threatening to cut government funding to charities who fail to put robust safeguarding measures in place.