The Roman Catholic order, which was founded by St Francis of Assisi, says an internal investigation which began four months ago has found extensive financial irregularities at the Order of Friars Minor which has around 14,000 members worldwide and owns churches and convents in more than 100 countries, including the UK.

According to Italian media reports, this allegedly includes making investments in offshore shell companies based in Switzerland, which had been involved in questionable business deals and investments.

Michael Perry, the American monk who is head of the order , took the unusual step of writing an open letter to friars and monks to inform them that the governing body of the order ‘finds itself in grave, and I underscore “grave”, financial difficulty, with a significant burden of debt'.

Perry said the general treasurer of the order had resigned, while friars belonging to the order, as well as outsiders, were found to have been involved in ‘a number of questionable financial activities’ which had placed the financial stability of the order ‘at grave risk’.

‘The systems of financial oversight and control for the management of the patrimony of the order were either too weak or were compromised, thus limiting their effectiveness to guarantee responsible, transparent management, ‘ Perry said.

A team of lawyers as well as the civil authorities, including possibly police, are now trying to determine ‘the nature, extent, and impact of what has occurred’, he said.

A senior friar with expertise in financial affairs has been appointed to lead the investigation into the alleged fraud and will go through records dating back more than a decade.

‘We are encouraged by the example set by Pope Francis in his call for truth and transparency in financial dealings in the church and in human societies,’ Perry wrote. The Pope has already initiated a radical clean-up of the Vatican bank since being elected in March last year.