The British government says it will withdraw public funding from Oxfam unless the charity organisation reveals everything it knows about sexual abuse allegations in Chad and Haiti involving seven of its officials.

Penny Mordaunt, British Development Secretary, who spoke on Monday after an emergency meeting attended by British government officials, said Oxfam’s leaders “also made a full and unqualified apology” and spoke of a “deep sense of disgrace and shame”.

The European Commission had also demanded that Oxfam offer maximum transparency in responding to the allegations about Haiti.

“We are ready to review and, if needed, cease funding to any partner who is not living up to the required high ethical standards,” said Maja Kocijancic, European Commission spokeswoman.

The Charity Commission said it had launched a statutory inquiry into concerns Oxfam “may not have fully and frankly disclosed material details about the allegations at the time in 2011, its handling of the incidents since, and the impact that these have both had on public trust and confidence”.

The Times reported on Friday that some staff who were in Haiti after the 2010 earthquake had paid for sex with prostitutes.

But Oxfam said it investigated the allegations in 2011 and then fired four people and let three others resign after uncovering sexual misconduct, bullying, intimidation and failure to protect staff.

The scandal, according to Time, had already forced Penny Lawrence, Oxfam’s Deputy Chief Executive, to resign her position, saying she took “full responsibility” for failing to act immediately in the sexual misconduct scandal involving the charity’s workers in Haiti following the 2010 earthquake.

Lawrence, Oxfam’s Programme Director at the time, said she was “ashamed that this happened on my watch”.

She said that the allegations of sexual misconduct were first raised about some Oxfam staff in an earlier mission in Chad.

“It is now clear that these allegations — involving the use of prostitutes and which related to behaviour of both the Country Director and members of his team in Chad — were raised before he moved to Haiti,” she said.

Responding to the Time’s report, Oxfam, in a statement on Friday, lamented that the behaviour of some members of its staff uncovered in Haiti in 2011 was totally “unacceptable, contrary to our values and the high standards we expect of our staff.”

While it noted that four members of staff were dismissed as a result of the investigation and three, including the country director, resigned before the end of the investigation, it said allegations that underage girls may have been involved were not proven.

“After the investigation, we carried out a thorough review of the case, which resulted in the creation of our dedicated Safeguarding Team and a confidential ‘whistle-blowing’ hotline as part of a package of measures to ensure that we do all we can to protect our staff, prevent sexual abuse and misconduct happening in the first place and improve how we handle any allegations,” it added.