THE head of gas industry watchdog Ofgas, Clare Spottiswoode, last

night insisted she had not had a sexual relationship with a top civil

servant at the Department of Trade and Industry.

Miss Spottiswode angrily made her denial to reporters at Westminster

after emphasising to a committee of MPs her independence as the

director-general of Ofgas, which oversees the rights of the 18 million

gas consumers.

Reports have claimed she gained her #70,000-a-year post after her name

was added to the short list by DTI Under-Secretary John Michell. Miss

Spottiswoode, 41, allegedly sent him thank-you flowers after her

appointment.

Last night, after appearing before the Environment Select Committee,

she was asked by reporters if she had had a sexual relationship with Mr

Michell. She replied: ''I have not. I am really angry with this sort of

thing.''

In her evidence to the committee, Miss Spottiswoode acknowledged she

had been interviewed by Mr Michell and another official in one of a

series of interviews for the Ofgas post.

Miss Spottiswoode had worked in the Treasury at the same time as Mr

Michell, but she made clear to reporters after the hearing that they had

worked in different divisions.

The committee did not question Miss Spottiswoode about the claims she

had sent flowers to Mr Michell after being appointed last November.

A DTI spokeswoman earlier confirmed an inquiry into rumours about the

appointment was carried out by a senior civil servant who ''found no

cause for further action''.

Miss Spottiswoode told the committee she was independent of Government

departments and pressure groups.

She said: ''This is quite a lonely job. One is very much on one's

own.''

She declared she was ''uncomfortable'' with her power to raise money

by approving energy efficiency schemes involving a levy on the price of

gas.

Miss Spottiswoode acknowledged she had taken advice from Tory former

Minister Peter Morrison in one informal meeting lasting up to half an

hour, in which they had discussed controversy over her stance on the

schemes.

Mr Morrison had told her it was sensible to ''play everything down''.

She said she was now ''more positive'' about such schemes after

initially believing that they were illegal. Fresh legal advice showed

they were not.

Miss Spottiswoode also told MPs that she met Energy Minister Tim Eggar

on occasion and she ''occasionally'' met President of the Board of Trade

Michael Heseltine.

Emphasising her independence, she said: ''They are terribly careful

about not imposing their will on the regulator. They are quite aware

that that would be wrong in principle.''