UNEMPLOYMENT and training services in the borough provided by a charity may be at risk because of its financial difficulties, the council has admitted.
Last week the Guardian revealed that senior council officer Clive Morton, who is in charge of culture and leisure, had stepped in to help the O-Regen group with its cash problems.
The charity has close ties to Waltham Forest Council and owns a number of key community facilities while also providing resources for various grassroots projects.
Accounts published by the Charity Commission show O-Regen has spent more than it received in income every year since 2006, adding up to a total loss of £1.6million.
The council has today confirmed for the first time that O-Regen is facing difficulties, but the organisation itself refused to admit there were any issues when approached by the Guardian.
De Mason, O-Regen's business operations manager, denied all knowledge of financial problems.
She also said she did not know that the group had been operating at a loss since 2006.
Ms Mason declined to comment further.
In a statement today, the council defended using public resources to help an independent charity in this way.
A spokesman said: "it is not unprecedented for a council to offer short-term support to a local organisation where services or facilities used by the community might be at risk.
"O-Regen asked for our assistance in this matter and we obliged. There is no financial risk to the Council in doing so.
"O-Regen have previously tendered successfully for council contracts around worklessness and employment, and these contracts have been monitored carefully to ensure the best possible value for the local community."
O-Regen runs the Epicentre and Click Centre in Leytonstone, the Score centre in Leyton and a training college in Blackhorse Lane, Walthamstow.
It employs 31 full-time staff and began operating in 1998.
It has also worked with the council under its Local Strategic Partnership and Neighbourhood Renewal Fund (NRF).
The chair of the charity's board of trustees, Conservative opposition leader Cllr Matt Davis, was unavailable for comment at the time of going to press.