Kids Company founder Camila Batmanghelidjh has accused "malicious" civil servants of plotting to bring down the charity.
During a stormy appearance before MPs, the controversial charity boss denied that the now defunct organisation had collapsed because it had been badly run.
She said that it had only been forced to fold after details were leaked last July that Scotland Yard had launched an investigation into historical sexual abuse at the charity.
The chairman of the trustees, BBC creative director Alan Yentob, said that in the immediate aftermath of the closure there had been stabbings, suicide attempts, and one child had been murdered.
But the chairman of the Commons Public Administration and Constitutional Committee Bernard Jenkin said they had been told the incidents had occurred because the children no longer had the cash they needed to pay their drug dealers.
During a three-hour hearing before the committee, Ms Batmanghelidjh and Mr Yentob repeatedly denied allegations of financial mismanagement at the charity – which received millions in public funds.
Ms Batmanghelidjh insisted they would have been able to carry on if it was not for the leak of the police investigation just hours after the charity received a £3 million government grant intended to help secure its future.
"I do think it is very suspicious - the timing at which the grant arrives in our account and these allegations arise," she said.
"Only our finance person and the Cabinet Office knew that the money had hit our account. Suddenly out of the blue we get allegations that we don't even know relate to sexual abuse.
"Within hours, it was all over the BBC and news outlets that these related to allegedly sexual abuse against children by Kids Company. That was the kiss of death for a charity dealing with children."
Ms Batmanghelidjh - who has been publicly feted by David Cameron and other leading politicians – said there were officials in Whitehall who had deliberately set out to undermine the charity by briefing against it.
"Some civil servants have been absolutely malicious and unprofessional and have behaved in ways that isn't respectful of a democracy and you need to look into this," she said.
Challenged by Mr Jenkin as to what evidence she had for her allegations, she replied: "I will produce it."
Mr Yentob said that once it became public the charity was under investigation it had been impossible for them to accept a series of donations lined up from private benefactors and they had to shut.
Challenged about a memorandum set to the Cabinet Office warning that communities helped by Kids Company could descend into savagery, looting and arson if it closed, Mr Yentob said it was describing a "worst case scenario".
Nevertheless, five days after it shut down, he said that a boy had been murdered, while there were stabbings and four suicide attempts as the "consequence of the absence of a place for these children to go".
Mr Jenkin retorted: "We have been advised that these incidents occurred because the kids no longer had money to pay their drug pushers."
Earlier Ms Batmanghelidjh denied that the charity handed out "willy-nilly" hundreds of pounds in payments to clients, insisting that all the grants it made had been properly approved.
She repeatedly accused the MPs of failing to understand the charity's work which she said involved helping children and young people who had been failed by the state.
The MPs in turn expressed frustration at her failure to answer their questions, accusing her of talking "psychobabble", while at one point Mr Jenkin warned her that it was a "contempt of Parliament to mislead this committee".
Mr Yentob, meanwhile, rejected claims he had sought to use his position as a senior BBC executive to influence the corporation's coverage of the problems of the charity.
He acknowledged however that when Ms Batmanghelidjh was interviewed on the Radio 4 Today programme, he had stood alongside the producer – a move which he accepted could have been seen as intimidatory.
"If it was intimidating, I regret it," he said.