Skellett nightmare ends as fraud charges are dropped

The Crown Prosecution Service is expected to recommend that charges are dropped this week against Colin Skellett, the chairman and chief executive of Wessex Water, who was arrested in August and accused of corruption.

Mr Skellett is alleged to have received a £1m bribe from YTL, a Malaysian company, in order to back its purchase of Wessex from a subsidiary of Enron, the collapsed US energy giant.

However, Mr Skellett, who deposited the money in a UK bank account and paid tax on it, said the payment was an advance on a consultancy deal with YTL signed after the £1.24bn sale went through.

YTL backed up his story and officers from the City of London fraud squad travelled to the US, where they are understood to have been told that Mr Skellett had no role in the final negotiations to sell Wessex to YTL.

The CPS is currently considering a file from the City fraud squad and is expected to rule early this week on whether to proceed with the case. Mr Skellett is due in court on Wednesday for a hearing to extend his bail and the case could be dropped as early as then.

Mr Skellett was arrested at his home near Bath at 6.30am last August by seven police officers who had travelled up from London. The case turned into a media circus and Mr Skellett was forced to resign from his post as chairman of Jarvis, the construction group, because of the bad publicity.

However, he has maintained his role at Wessex and has been backed by YTL, a group whose interests range from hotels to aggregates and is believed to be close to the Malaysian Prime Minister, Mahathir Mohammed.