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OTTAWA -- The Trudeau Liberals and WE Charity have parted ways over the management of a $900-million federal program to pay students and fresh graduates for volunteer work this summer, days after the prime minister himself called the organization the only option for success.

Instead, public servants will administer the pandemic-related grants, Prime Minister Justin Trudeau said Friday.

Since the charity founded by brothers Craig and Marc Kielburger was announced as the manager of the program last week, the sole-sourced deal has been criticized because of Trudeau's close relationship with the group. He, his wife and his mother have all been involved in WE events and activities.

Charity experts have also questioned whether WE is equipped for the fine-grained management of such a big government-funded program.

Trudeau repeated Friday morning that his consciousness of his close relationship with WE meant it was left to the public service to decide how to manage the program, and to carry out what he called a "transparent and open" process to ultimately go with WE.

Speaking to reporters, Trudeau lamented what he called the "unfortunate" unfolding of events over the last few days. He said the government supported the organization's decision.

He said there may be things that federal officials won't be as well placed to do, such as actively recruiting students -- there have already been 35,000 applicants for the program by WE's count, exceeding early expectations of 20,000 -- and supporting small groups with onboarding and training volunteers.

"One of the things that ends up happening with this is that young people won't maybe have the same kind of access to programs that they ... would have," Trudeau said.

"We will continue to work very hard and we need to reflect carefully on what exactly went wrong and how we can make sure that we're doing a better job of supporting young people in the coming months and years."

The volunteer program is to pay up to $5,000 for schooling costs for participants who volunteer the maximum 500 hours, and is aimed at students who can't find work this summer because of the COVID-19 pandemic.

Youth Minister Bardish Chagger said in a statement that volunteers who have already signed up shouldn't be adversely affected, and WE Charity will pay back money it's already received from the federal government.

The Liberals had set aside about $19 million for the organization to administer the program, but the final amount was dependent on how many young people joined it.

The charity did not say how much it had received or repaid when asked, pointing to a statement that "reflects all that we have to say on this matter."

In the statement, WE pointed to the ongoing controversy around its involvement in the program as the source of its decision, even though "the government has provided explanations" to all questions.

The statement went on to say that the organization was concerned that an ongoing affiliation would mean "the program itself will begin to suffer -- and as a consequence, opportunities for students might be negatively affected."

The controversy over the charity's involvement only grew as the days wore on, including with revelations of a recording, obtained by The Canadian Press and others, in which Marc Kielburger told youth leaders last month that Trudeau's office reached out one day after the grant was announced on April 22 to get the charity on board. Kielburger later retracted, saying he misspoke. A public servant had called, he said.

Trudeau didn't say whether his office had reached out to WE or the Kielburgers when asked Friday about the recording.

Opposition parties have asked the multiple federal watchdogs to take a closer look at the deal, including a request from the New Democrats on Friday to the ethics commissioner.

NDP Leader Jagmeet Singh said in a tweet nothing clears up why and how the decision was made in the first place, adding that Trudeau "still needs to answer for this scandal."

Conservative employment critic Dan Albas said the Liberals need to back up Trudeau's comments that the public service ran a transparent, open and rigorous process.

"Canadians deserve answers," he wrote on Twitter. "All agreements and communications related to this sole-sourced outsourcing agreement must be audited and examined."

This report by The Canadian Press was first published July 3, 2020.