FUTURE care for terminally-ill children is under threat after it was revealed that Hampshire’s children’s hospice has £5.7m at risk.

Naomi House, based at Sutton Scotney near Winchester, has the money tied up in British-based Icelandic bank Kaupthing Singer and Friedlander.

The bank has been taken over by the Icelandic Government and the future of its money is highly uncertain.

Naomi House has put around 37 per cent of its cash assets into the bank including some earlier this week.

Khalid Aziz, the chairman of the Wessex Children’s Hospice Trust, which runs Naomi House, said if the money was not returned it would cause major damage to the hospice’s ambitions.

Most at risk would be an outreach scheme whereby dying children are helped in their homes.

Mr Aziz told the Daily Echo: “If we don’t get the money it will set us back in helping even more families in our outreach programme for emergency care at end of life situations in people’s homes.

“We may be forced to sell shares, when it is a bad time to be selling shares and we may be forced to sell properties we have inherited.”

Mr Aziz defended the decision to invest such a relatively large sum in one institution.

He said: “This is a British bank, regulated by the FSA and was being given a AA rating right up until Monday.

We took professional advice and we thought it was the right thing to do.”

He said he believed some £700,000 was on its way to their bank and another £1.3m had been requested on Monday and may too soon be safe, leaving £3.7m outstanding.

In an earlier statement, he said: “Clearly this is potentially worrying news for our families, staff, volunteers and supporters. But I want to assure them that everything is being done to ensure full recovery of our funds.

“There will inevitably be some delay in receiving our money but we believe we have the necessary reserves in the short to medium term to weather the storm.

For all involved it is very much business as usual.”

The hospice has made contact with the Treasury asking for clarification that the sum will be honoured through the commitments they have made as part of the support package the Government announced yesterday.

The sum at risk is almost the same as the £6m left to the hospice by the late Southampton businessman Jack Witham.

That bequest is funding half of the cost of a new hospice being built in the grounds of Naomi House, to be called Jack’s Place.

A spokeswoman stressed that the crisis does not affect the plans for Jack’s Place.

A stone-laying ceremony to mark the start of building work is being held on Monday.