The scourging of Spottiswoode: Flowers and foreign trips got her into trouble, but Britain's gas watchdog is fighting back

CLARE Spottiswoode's cheeks were flushed and her lips dry. It was just 24 hours since the director-general of Ofgas had endured her interrogation by an all-party Commons Select Committee. 'I've never had an affair in my life, and never even kissed anyone since I met my husband in 1973,' the wayworn watchdog said.

She spoke in short, nervous bursts about the allegations that she had compromised Ofgas independence by, among other things, a relationship with John Michell, under-secretary for oil and gas at the Department of Trade and Industry. 'I'm completely . . . there's no history there,' she said.

Wednesday's Select Committee on the Environment questioned her about the manner of her appointment six months ago, her relationship with Mr Michell and allegations that as a regulator, she was too close to both the DTI and British Gas. She felt the worst was over but sounded hurt, particularly over the questions raised about her trips with Mr Michell to Belgium and Canada.

'No matter how untrue the allegations are, a little bit of mud sticks. It is just not fair on the (gas) industry.' There were people with an interest in discrediting her, as the industry moved 'from a monopoly to a competitive situation'.

Ofgas represents 18 million consumers of gas. It has the power to set price controls and refer companies to the Monopolies and Mergers Commission. Ms Spottiswoode, aged 41, a Lancashire businesswoman (not to mention Cambridge and Yale graduate and former London Business School lecturer), was appointed industry regulator six months ago by Michael Heseltine.

Since then, she has courted the media and talked about her happy family. She has pushed hard for publication of a controversial consultation paper whose recommendations could raise gas prices in remote areas; opposed taxes on gas consumers to fund energy efficiency schemes and antagonised her predecessor, Sir James McKinnon, with allegations (which she later had to retract, with 'unreserved' apologies) that he had acted illegally in allowing the costs of energy efficiency schemes to be passed to consumers. Paid pounds 70,000 a year, she is nicknamed Boadicea.

Her scourging began on 19 May, when Robert Jones, the Conservative chairman of the Select Committee, phoned John Gummer, the Environment Secretary, about rumours suggesting that there had been irregularities or improprieties in her appointment, and that she had sent Mr Michell two dozen red roses when the appointment became formal.

'I was called in by Sir Peter Gregson (permanent secretary at the DTI) to be interviewed - as was John Michell, though the interviews were separate, obviously. It was accepted there was nothing of any kind going on between us. They already knew the allegations about the appointment were complete and utter nonsense.'

Ms Spottiswoode's sixth- floor office in Victoria is reached by a lift shaped like a keyhole. It soars above an atrium fountain and shrubbery. The office has multi-coloured marble and blue carpet with bright flecks in it. The director- general wore a navy dress with a floral pattern. Flowers are a favourite theme. 'I'm not a shy, retiring flower that they might pick up when they look at me,' she said. 'I do wear quite flowery dresses and am quite feminine in my approach, but they've learnt there's a rod of steel underneath.'

And her floral tribute to Mr Michell? 'Ah-ha, the flowers. On my first formal day here I sent three bunches of flowers: one to the headhunters (who brought her to the DTI's attention); one to a person who had given me a really good reference; one to John Michell, partly because he was the civil servant in charge of the appointments procedure - I don't have any idea of what role he played, and he certainly didn't make the appointment - partly because he'd organised office space, introduced me to people, tried to smooth my path coming into this very difficult job.

'And I deliberately . . . I actually asked the florist - I said, 'All these three bunches are for work-related things and they are people I don't know very well. So will you please make them appropriate.' So the last thing they'd be is red roses. And they weren't. As it happens, John Michell's bunch was reddish.'

Her press officer, Chris Webb, interjected. 'The flowers arrived at a very public moment. Mr Michell was meeting with his officials when these flowers were brought in . . . '

Ms Spottiswoode: ' . . . by his secretary, who said, 'These are from Ms Spottiswoode.' ''

On Monday evening, she was with her solicitors, preparing for her Select Committee appearance, when she became aware of a Guardian article to be published the next day. 'We called in the litigation person,' she said. 'They said, 'This is terribly difficult because the things you know are absolutely wrong, you can prove them absolutely wrong and are irrelevant. The things about the appointment - the papers in the DTI will prove them wrong, so you don't have to worry about that. So the damaging allegation is about the affair. And they're going to make sure it's not put that way.' And that's exactly what (the article) did. What does 'good friends' mean? It's the innuendo. (But) you can't sue for being accused of being good friends. I mean, John Michell and I are very good friends, because we've been working closely together.'

The watchdog thinks gender is half the problem. 'There is no way, had I been a man, that anyone would have thought anything about going away on a one-day trip to Brussels or a five-day trip to Canada. It makes it difficult if every time you go on a busy and hectic business trip, you have to worry about the propriety of it.'

There were opponents about: Conservative MPs whose constituencies 'might be disadvantaged by (gas industry) competition'; the Labour Party, which seemed to be against a Bill to restructure the industry; 'anyone who is against Michael Heseltine for whatever reason,' she said. 'One is at the mercy of a whole series of forces . . .'

Mr Webb: 'Who knows?'

Ms Spottiswoode: 'Who knows?'

Someone wishes her ill?

'Someone, somewhere is giving tittle-tattle (to) impede us in trying to get a Bill through Parliament. There are MPs getting upset about things they know nothing about, and inevitably a whole lot of people out there who think there's something slightly funny, slightly tainted. And if that is happening, then anyone who wants to kill the Bill is achieving a good job.'

Yet, she would not be defeated. Her staff had been 'incredibly supportive'. Her husband, and father of her two children aged two and four, was 'not a problem. He absolutely knows I'm innocent . . . I'm so sort of clearly faithful.' Mr Michell was 'not a problem either - though I think his wife's finding it quite difficult being door-stepped by photographers. It's terribly unfair.' There were encouraging portents. 'Today I saw, completely by accident on the street, one of the MPs who was on the Select Committee, and he said I did a very good performance. He said: 'I'm very sorry about all these things that are going on. We know it's not true, and the Select Committee believes it is not true.' So I feel from that point of view it is all over.'

Might there be a book in it one day? Did Boadicea keep a diary? 'I'm not a great writer,' she said. 'I've never been a great writer. Hence the flowers] Had I been a great writer, I'd have probably written a little card. But flowers were more appropriate for my style.'

Geraldine Bedell, page 17

(Photograph omitted)