A Chief Constable was considering taking legal action today after the Independent Police Complaints Commission announced it was investigating an allegation that he used "undue influence" to appoint a member of staff to his force.
Sean Price, the chief of Cleveland Police, said he refuted the accusation about a junior member of staff in late 2008, which he regarded as malicious.
Those responsible for "initiating and spreading incorrect information" could be sued for defamation of character, he warned.
The IPCC said the allegation came to light during a review by Her Majesty's Inspectorate of Constabulary into the way some individuals within Cleveland Police Authority "may have conducted some of its business".
A separate criminal investigation has been launched into a number of people with current or past associations with Cleveland Police Authority and was being conducted by Warwickshire Police's Chief Constable Keith Bristow.
A commission spokesman said: "The IPCC is not actively involved in this criminal investigation, but is being kept informed about its progress.
"The IPCC's independent investigation will focus on the allegation that Mr Price used undue influence to have an individual appointed to a position within the police force."
In a statement, Mr Price responded: "I understand that this allegation relates to the recruitment process for a junior member of staff in late 2008.
"I completely refute the accusation, which I regard as malicious as I took no part in the recruitment process. I further believe the allegation is mischievous in seeking to cause comparison with recent events in other forces.
"I realise the IPCC need to investigate this matter and will assist in every way that I can.
"I want the matter to be cleared up as soon as possible and I am sure that everyone will realise the damage that such an allegation could have on my personal standing and confidence in the force.
"In addition I am taking legal advice regarding any action I may take in the future against those responsible for initiating and spreading incorrect information that defames my character."