The Al-Khair Foundation, an international charity with a base in Oldham, is being investigated by the Charity Commission for alleged links to Hamas.

The charity, based on Featherstall Road in the Westwood area, provides support to victims of disaster and poverty largely across the Middle East and Africa, and also works to promote education, religion and general social welfare.

The Charity Commission received a complaint alleging the foundation and its partners had connections to Hamas, which is considered a terrorist organisation in the UK. It was also accused of giving direct funding to the group.

On July 31, one of the charity's directors was arrested in the UK for conspiring to funnel money and supplies to Hamas. Mohammad Yousef Hasna, 45, of Istanbul, Turkey, was accused by the US Department of Justice of having worked closely with the group's senior leadership to do so.

US attorney Jamie McDonald said Hasna "worked closely with Hamas's senior leadership to deliver supplies, food, funding, and other materials to terrorists under the guise of humanitarian aid."

He added: "Our arrest of Mohammad Hasna demonstrates our commitment to dismantling Hamas's illicit global financing networks and the sham charities that support terrorist organisations and their violent aims using the lie of philanthropy."

Hasna is now awaiting extradition to New York to face three separate charges related to financing terrorism, each carrying a maximum of 20 years in prison.

Last year the Al-Khair Foundation raised £74,790,071, with £72.51 million of that coming from donations and legacies. Only £2.27 million was raised by charitable activities, with the remainder from "other sources", according to the Charity Commission's overview. 98 per cent of its expenditure went towards "charitable activities".

The complaint has now escalated into a statutory inquiry, and the charity is banned from sending payments to Gaza, to Hasna, or to his organisation without the Charity Commission's permission.

The commission will investigate the nature of the charity's links to Hasna, whether it carried out appropriate checks on its international partners, and how the money has been used. It will also examine whether any failures or weaknesses were due to misconduct or mismanagement by trustees, and whether the organisation had measures in place to protect funds from being misused.

The foundation's main bases in Croydon are also being investigated by Counter Terror Policing London.

The foundation said it is "co-operating fully" with the inquiry and that it filed a serious incident report with the Charity Commission before the inquiry was launched.

A spokesperson said: "Everywhere we work we are firmly committed to ensuring that the funds entrusted to us by our generous donors are used for their intended purpose: meeting the humanitarian needs of poor and marginalised people in the communities we serve. Al-Khair Foundation is deeply committed to supporting those in need in Gaza. Our significant support over many years has included providing food parcels, hot meals, clean water, medical aid, shelter materials, winter assistance and orphan and family support."