A CHARITY set up by the late Body Shop founder Dame Anita Roddick is under investigation by a watchdog over its previous funding of a prisoners’ rights group.

The Roddick Foundation is the subject of a compliance case by the Charity Commission over grants made to Cage.

The group Cage, which claims to campaign against the “war on terror”, sparked anger this week when it claimed the Londoner believed to be Islamic State executioner Jihadi John had previously been harassed by the security services.

A Downing Street spokesman said the suggestion was “reprehensible”.

National reports state the Roddick Foundation has awarded grants to Cage, then known as CagePrisoners, over a period of around four years starting in 2009.

The commission is also looking at grants given to the organisation by the Joseph Rowntree Charitable Trust.

A commission spokesman said it was looking into how the grants were used and said Cage's actions raised “clear questions” for charities.

A spokesman for the commission said: “We have compliance cases open into both the Joseph Rowntree Charitable Trust and the Roddick Foundation.

“In both cases the commission’s regularity concerns are about how the trustees have ensured that charitable grants made to non-charitable bodies are only used for exclusively charitable purposes in line with their objectives.

“This regulatory engagement has included robustly examining each charity’s decisions to previously make grants to Cage, which is not a charity.

“Public statements made in the last few days by Cage raise clear questions for a charity considering funding its activities as to how they could comply with their legal duties as charity trustees.”

Entrepreneur Dame Anita, from Littlehampton, opened the first Body Shop store in Brighton in 1976 with a focus on fair trading and testing products without the use of animals.

The franchise grew to serve 77 million customers and the Littlehampton-based organisation became one of the largest employers in Sussex.

After being diagnosed with Hepatitis C thirty years after contracting the disease during a blood transfusion in child birth, Dame Anita mounted a campaign to raise awareness.

She eventually succumbed to her illness with a brain haemorrhage in September 2007 and donated the vast majority of her fortune to charity, with £51 million left to the Roddick Foundation.

The foundation now has its headquarters on the Beehive Ring Road at Gatwick.

The Argus contacted the charity for a response but there was no reply.