BBC correspondent Phillipa Thomas says Daniel Sharp is challenging the Woodwards to "put up or shut up"

At an emergency meeting on Tuesday they unanimously backed Ms Woodward's parents Sue and Gary and pledged to continue to support the family.

In a statement the trustees' chairman, the Rev Ken Davey, appeared to dismiss the idea that it was even possible for members of the Woodward family to defraud a fund that was set up for their benefit.

"The Trust Deed expressly defines the beneficiaries as Louise, her mother Susan, her father Gary and any other relatives or dependants as the trustees may Determine," the statement said.

The Woodwards insist they did not forge an expenses bill

"Any payments to these beneficiaries therefore come within the objectives for which the trust fund was established."

It added that the trustees continued to believe that Louise's parents had always acted in "an honest and straightforward manner".

Mrs Woodward said she welcomed the trustees' decision. She added that she would not make any further comment until after the appeal decision on her daughter's conviction.

Accusations and denials

The allegations of fraud were made by the American lawyer Daniel Sharp, whose wife, Elaine Whitfield Sharp, was a key member of Louise's defence team until she was sacked over claims that she doubted her client's innocence.

Elaine Whitfield Sharp: claims the Woodwards stayed with her for free

Mrs Woodward strenuously denied that she faked an invoice of more than £9,000 for accommodation during her daughter's trial when she was staying for free at the Whitfield Sharp home.

On Monday Mr Sharp said: "We didn't charge the Woodwards one penny.

"This is a phony bill and it is clear they were taking money from the trust and lying to the trust."

The lawyer for the Woodward family in England, Paul Barrow, hit back, saying: "This is not a forgery."

The BBC's Nick Garnett reports from Elton on the latest developments

He added: "That statement of account was handed to the Woodwards by the Whitfield Sharps and any allegations of impropriety are absolutely denied by the Woodwards."

Mr Sharp reacted angrily to the trustees' statement. He challenged the Woodwards to produce their cancelled cheque to prove they had paid him and his wife.

They should "put up or shut up", he added.

Appeal judgement imminent

Louise Woodward, 20, from Elton, near Chester, is awaiting an imminent decision on appeals lodged both by her and the prosecution against her "time-served" sentence for the death of baby Matthew Eappen.

The Supreme Judicial Court in Massachusetts can quash the conviction, allow it to stand, or reimpose the original conviction and life sentence.

The trial judge, Judge Hiller Zobel, reduced the conviction from second-degree murder to manslaughter and cut the mandatory life sentence - which would have meant no parole for a minimum of 15 years - to the period Woodward had already served.