Ofgas director denies affair: Anger over allegations of relationship

CLARE SPOTTISWOODE, the director-general of gas supply, yesterday rejected allegations that she had a close personal relationship with a senior civil servant at the Department of Trade and Industry.

She also attacked as 'groundless' reports that in her role as regulator she maintains too close a link with the DTI and with British Gas.

Speaking after giving evidence to the House of Commons Environment Select Committee, Ms Spottiswoode said she was angry about the allegations and had little opportunity to defend herself.

Asked whether she had a sexual relationship with John Michell, one of the civil servants who interviewed her for her job, she said: 'No. I have not.' Although she worked at the Treasury at the same time as Mr Michell, Ms Spottiswoode said she had barely recognised him at the interview and did not believe he recognised her.

Earlier, the director-general apologised 'unreservedly' to her predecessor, Sir James McKinnon, for alleging before the committee in March that he had acted illegally in allowing the costs of energy efficiency schemes to be passed to consumers. She said she now believes he acted entirely legally and in a proper manner.

Sir James, who also gave evidence yesterday, said: 'I have never broken the law . . . and I am extremely sorry that I have been besmirched.'

He said energy-saving schemes were in the interests of the community and he could see no reason why gas and electricity customers should not contribute. Sir James, who had hoped that about pounds 125m a year could be raised through a levy on bills, said it was surprising his successor took a different view.

Ms Spottiswoode told the committee that the question of energy-saving and the environment had not been raised throughout the process of her selection for the job, which included interviews with Tim Eggar, the energy minister.

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