An ambitious plan to pump “significant” profits from the film Slumdog Millionaire back into the Mumbai slums where the film is set has been revealed by Danny Boyle, the film’s director.

Boyle said investors, who are set to benefit from millions in box office profits, were planning to meet in London next week to discuss how much money to put into a special fund and how best to distribute the cash.

“We want to set it up as soon as possible. What absolutely mustn’t happen is that the money disappears, or people think this is a PR stunt,” Boyle said.

Boyle and Christian Colson, one of Slumdog’s producers, revealed the plan after mounting criticism of the film’s alleged financial exploitation of its child stars and its portrayal of Indian slum life.

The multi-award winning and nominated film follows the occasionally brutal rags-to-riches story of an Indian slum dweller. Boyle insisted that the fund was not being set up in response to criticism of the film.

“This is our chance to give something back to an extraordinary city which has helped us produce an extraordinary film. We came up with it once we realised what a success the film was becoming after the Golden Globes,” he said. Slumdog won four Globes: best drama, best director, best screenplay and best original score.

The aim of the fund would be to help underprivileged children, Boyle said. He would not be drawn on specific figures. The fund would distribute money to projects in Mumbai and “perhaps” the rest of India.

The men strenuously denied claims carried in the press that the children, who still live in shacks alongside Mumbai’s railway, had been exploited. Colson said Rubina Ali, who played the young Latika, and Azharuddin Ismail, who played Salim, were paid “three times the amount of an annual adult salary” for what amounted to a month’s work.

A substantial lump sum (the men would not be specific) would be paid to the children once they reached 18 and completed their studies. “It’s a carrot to encourage them to stay at school,” Colson said.

The feverish media interest in the children has meant that they have had to be removed from school in Mumbai and returned to their original village homes, he added.

Since the children began their education last June, at the film-makers’ expense, “the transformation of them has been eye-watering,” claimed Boyle, who added he was “determined to protect them from anything that might distort or harm” their future opportunities.

Colson said “a conscious decision not to shower” the children with money from the movie had been made. “They would not be able psychologically and practically to handle that,” Colson said. “Our plan is to ameliorate their lives.” The men also responded to the controversy over the film’s title.

“Referring to people living in slums as dogs is a violation of human rights,” claimed Tateshwar Vishwakarma, an Indian social activist, who has called for effigies of Boyle to be burnt in protest.

“Protest is a way of life in India,” Boyle said. “It’s an extraordinary democracy. You just hope it won’t become violent. My concern is that it doesn’t hurt the kids and that my own children don’t see anything like that. It’s distressing.”

Boyle said the word “slumdog” wasn’t intended as an insult. “It’s meant as ‘underdog’, the romantic idea of a guy succeeding on his own terms against all kinds of adversity. We tried to reflect as much of the city as we could. It’s a place of extremes. The feel-good element comes from Mumbai having this extraordinary resilience and effervescence of energy. Like New York, it’s a city that grabs you by the throat and says ‘Welcome’. I am proud of it.”

Colson said: “Whatever criticism is levelled against the film, we made it in good faith.” Boyle claimed he had no expectations of Baftas or Oscars - quoting Benjamin Franklin’s “In this world nothing is certain but death or taxes” - but Slumdog remains a hot awards favourite. Yesterday, at the Richard Attenborough Film Awards, it won film of the year, director of the year and rising star of the year for its lead male actor, Dev Patel.

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