The investigation into the Liverpool-based Foundation, led by Sir Philip Carter, was ordered after the allegations were made last Friday.

A detailed report is being prepared for the Charity Commissioners.

Investigators are known to be examining expense claims submitted by a member of staff and the use of a credit card.

Sir Philip said: "The investigation was initiated by the trustees immediately on hearing allegations of financial irregularities concerning an employee of the Foundation.

"There will be no further comment until the investigation is complete," he added.

Chief executive leaves

The Foundation's chief executive, Sylvia Ingham, left her £50,000 per year post on Monday.

She had been with the charity since 1993 and had helped it raise more than £12m.

The charity was founded by Ray Donnelly in 1990 as the Lung Cancer Fund to provide money for university research, for smoking prevention programmes in schools and to support specialist lung cancer nurses.

Roy Castle gave his name to the appeal to raise funds for an international research centre - which was finally opened in 1998, four years after Mr Castle died of lung cancer.