The charity got a fraction of the money

A judge at the Court of Session in Edinburgh heard that only �70,000 reached the Moonbeam Children's Cancer Charity out of an expected income of almost �3m.

The judge has ordered that the five Moonbeams directors should be suspended from having any control over the charity.

A chartered accountant should be brought in to manage its affairs and its bank accounts should be frozen.

The charity provides holidays for children suffering from cancer.

Holiday house

In a petition presented to the court, Lord Advocate Colin Boyd said that over four years the trading arm of Moonbeams received only a fraction of its income.

He also alleged that a holiday home in America was being reserved by staff when it was intended for use by children and their families.

Mr Boyd submitted that there was or had been mismanagement or misconduct by the directors of the charity in its administration and that of the trading arm, Moonbeams UK Ltd.

Of �2,942,463 taken in a four year period by Moonbeams UK Ltd, only �70,983 had been covenanted and paid to the charity.

Moonbeams offers a holiday home in Florida

The lord advocate said the present directors of the charity were William Power, of Piersfield Grove, George Douglas, of Drum Brae Drive, David Sinclair of West Pilton Street and Dorothy Ford of Bryce Avenue, all Edinburgh, and Karen Stewart, of Denholm Road, Musselburgh.

Mr Power, Mr Douglas and Mr Sinclair, along with Thomas Young, of Lady Brae, Gorebridge, in Midlothian, were the current directors of Moonbeams UK Ltd, which was established in 1998.

Mr Power, who originally established the charity as a trust, was previously in the role of paid office manager.

He was also a trustee and the Scottish Charities Office told him in 1994 that the employment of trustees was prohibited under its constitution.

He resigned his trusteeship but retained the role of full-time office manager up until 1999.

Staff 'shocked'

The lord advocate said that Mr Power's daughter, Katherine and a male friend had been allocated a reservation for a fortnight's use of the charity's home at Davenport, near Orlando, in Florida earlier this year.

The charity said on its website that the four-bedroom house with private swimming pool was available for the use of families and that demand was such that bookings were now being taken for 2005.

The lord advocate said that the booking allocated to Miss Power and her friend was "contrary to the objects of the charity and to the detriment of families who have been denied the opportunity to use the property on the grounds that it is not vacant over the period".

Moonbeams was not represented at the hearing.

I'm sure public confidence will be dented by this and we need to assure members of the public that the vast majority of charities are honest Martin Syme SCVO

The Crown Office said those affected by the orders have 21 days to decide whether to respond to its petition.

Staff were said to be "shocked beyond belief" by the developments.

Earlier this year, Scotland's minister with responsibility for charities promised to appoint a regulator after one organisation's accounts were frozen.

Communities Minister Margaret Curran told the Scottish Parliament said she shared public concern about the case of Breast Cancer Research Scotland (BCRS) and a regulator would be appointed "as early as possible".

The Scottish Council for Voluntary Organisations (SCVO) said the Moonbeams case reinforced the need for tighter regulation.

Chief executive Martin Syme said: "We are promised a draft bill in the spring and hopefully legislation this time next year and it can't come too quickly."

Mr Syme said it was a "big concern" for charities when damaging stories came to light.