THE director of a failed charity appeal to raise £15 million for the new Sick Kids hospital has been arrested and charged with fraud relating to her expenses.

Elaine McGonigle is set to appear in court next month to face the charges after being detained by police following a six-month investigation by officers.

The 47-year-old was in charge of the New Pyjamas campaign, which suffered a high-profile collapse last year.

Ms McGonigle was suspended then made redundant, and she later launched an employment tribunal case against the Sick Kids Friends Foundation (SKFF), which ran the campaign. Officials from the SKFF today said they had cooperated with the police inquiry but that it would be "inappropriate" to comment now that Ms McGonigle had been charged.

It is understood lawyers for the SKFF uncovered alleged discrepancies in the New Pyjamas accounts as they prepared to defend the employment tribunal case and contacted police.

Police were called in to probe Ms McGonigle's role in the collapse of the campaign, which cost £1m and raised £100,000, and the axing of ten staff. It is understood that the alleged fraud charges relate to Ms McGonigle's expenses and not the cash raised for the hospital. A police spokesman said: "A 47-year-old woman has been arrested and charged in connection with alleged fraudulent activity carried out while she was involved in fundraising activity for the Royal Hospital for Sick Children in Edinburgh. She is due to appear at Edinburgh Sheriff Court on August 3."

A spokesman for SKFF said: "We cooperated fully with the Lothian and Borders Police investigation and it would be inappropriate to comment at this moment."

A spokeswoman for NHS Lothian also said it would be inappropriate for them to comment following yesterday's developments.

The New Pyjamas campaign was supposed to generate £15m to make the new facility at Little France "truly world-class".

The charity's 2010 official accounts showed that, of the £600,000 spent "generating income" by the New Pyjamas arm, only £100,000 was raised. Together with other costs, including making ten staff redundant, the final figure is estimated to be just more than £900,000.

Ms McGonigle's camp maintained her innocence, instead blaming the SKFF for derailing the project, saying that it "takes money to make money", and that the £15m target would have been hit had SKFF bosses kept faith.

A subsequent investigation by the Office of the Scottish Charity Regulator cleared the SKFF of any wrongdoing.

When the Evening News contacted Ms McGonigle's Perthshire address yesterday, a woman who answered the telephone declined to comment.