Lottery regulator quits over treatment of Branson's bid

The chairwoman of the National Lottery Commission, Dame Helena Shovelton, resigned last night amid calls for her to go following criticism from a High Court judge.

The chairwoman of the National Lottery Commission, Dame Helena Shovelton, resigned last night amid calls for her to go following criticism from a High Court judge.

Chris Smith, the Secretary of State for Culture, said he was "sorry" to see her leave but fully understood why she had made "this personal decision".

Her departure came as the chairman of the lottery operator, Camelot, prepared to demand her resignation, saying she "gratuitously insulted" the company.A statement was to be issued tomorrow, by Sir George Russell and the Camelot board in what informed sources said yesterday was a decision to declare open war on the commission in an attempt to force the Government to reopen the competition to take over the next lottery licence.

Despite winning a High Court judicial review of the licence process last month, Camelot is still in second place behind the bid by Sir Richard Branson's The People's Lottery for the next seven year-licence, due to begin on 1 October 2001.

Camelot believed it must get its original bid completely reassessed or even redrafted by a commission under a different chairman to beat the Branson not-for-profit bid, sources close to the company said. It has even threatened further legal action to intensify pressure on the commission.

Camelot renewed its bitter complaints over the commission's behaviour after Mr Justice Richards ruled it had been "conspicuously unfair" in starting exclusive talks with Sir Richard on 23 August.

Jack Straw, the Home Secretary, said that the five commissioners should "consider their positions" and "were on notice" after their court defeat.