A council today denied "covering up" allegations that one of James Bulger's killers had sex with a female member of prison staff before he was released on parole.
The Sunday Times said the incident between Jon Venables and the woman was said to have taken place in an empty property at a secure unit while she was supposed to be looking after him during a walk in the grounds.
The newspaper said the encounter was believed to have taken place in 2000 when Venables was aged 17 - just months before the parole board sanctioned his release in June 2001.
It added the staff member at the Red Bank secure unit in Merseyside was accused of sexual misconduct, suspended and ultimately did not return to work.
Venables, now 28, had stayed at the centre in Newton-le-Willows - which is run by St Helens Council - since the age of 10 when he was first remanded in custody ahead of his murder trial where he was subsequently convicted of the abduction and murder of two-year-old James, along with Robert Thompson, who was also aged 10 at the time.
The Sunday Times alleged it was "many weeks" after the allegations at Red Bank surfaced that the matter was referred to the Home Office.
A council spokesman said: "St Helens Council totally denies any cover-up.
"Any allegations were thoroughly investigated by an independent team on the order of the Home Office and chaired by Arthur de Frischling, a retired prison governor."
Solicitor Laurence Lee, who represented Venables during the Bulger case, said he was backing the calls of James Bulger's mother Denise Fergus for a public inquiry into the allegations.
He said: "I never cease to be flabbergasted by the developments in the Jon Venables story. The tragedy never ends for Denise Fergus. It's another wound that's been opened for her."
He added: "This time Venables is not wholly to blame. I think the authorities have got a lot to answer for. It's just absolutely unbelievable."
Venables and Thompson lured the youngster from a shopping centre in Bootle in February 1993 and walked him several miles to a railway line in Walton where they killed him.
A spokesman for the Ministry of Justice refused to comment on the allegations of sexual misconduct or what the prison service's role in the matter was at the time.
He said: "In common with other secure children's homes, Red Bank is under local authority control. It would not be appropriate for the Ministry of Justice to comment on this allegation."
Venables was jailed for two years last July after pleading guilty to downloading and distributing indecent images of children.
Justice Secretary Kenneth Clarke asked Sir David Omand to examine how Venables was supervised on his release following his recall to prison.
Sir David made no mention of the sexual allegations at Red Bank in his report released last November.
The MoJ spokesman said: "Sir David Omand's terms of reference made it very clear that he was reviewing the management of Jon Venables from his release in June 2001 until his recall to custody in February 2010.
"The mentions of Red Bank in his report are to set context for his review and his findings.
"It was for Sir David to decide which individuals he wished to interview for the purposes of his review."Reuse content