U.S. officials say they will no longer fund a $20 million initiative in Pakistan to develop a local version of the popular American television series Sesame Street.

The U.S. Embassy in Islamabad would not elaborate on the decision to VOA, but Tuesday's announcement to cancel funding for the educational children's show comes after allegations of corruption surfaced against the local puppet theater working on the project.

The theater in question is the Rafi Peer Theater Workshop, which was working alongside Sesame Workshop — the American group behind the hit series.

The Pakistan Today newspaper quoted unnamed sources close to the project as saying the Rafi Peer group was involved in “severe” financial irregularities. The sources claimed that Rafi Peer officials allegedly used the U.S. money to pay off debts and award lucrative contracts to relatives.

Speaking to VOA, Rafi Peer CEO Faizaan Peerzada denied the allegations. He said the partnership was ending because the United States no longer had funding available after raising the initial $10 million.

He said his group would be taking on the project alone and was planning on beginning to shoot the second season later this month.

First broadcast in 1969, Sesame Street is the longest running children's television program in the United States. It was produced by a non-profit group called the Children's Television Workshop, today called Sesame Workshop. Money for developing the program comes from private foundations, the Corporation for Public Broadcasting and the United States government.

The show combines animation, music, large puppets and human actors to create a series of funny and creative lessons.