Camelot demands lottery watchdog resigns following 'gratuitous insult'

The chairman of the lottery operators Camelot is expected to demand the resignation of the head of the lottery commission over allegations she "gratuitously insulted" the company.

The chairman of the lottery operators Camelot is expected to demand the resignation of the head of the lottery commission over allegations she "gratuitously insulted" the company.

In a statement to be issued tomorrow, Sir George Russell and the Camelot board will call for Dame Helena Shovelton to stand down as chair of the National Lottery Commission after it was heavily criticised by a High Court judge last month.

Informed sources confirmed yesterday that Camelot has decided to declare open war on the commission in an attempt to force the Government to reopen the competition to take over the next lottery licence.

Despite winning a High Court judicial review of the licence process last month, Camelot is still in second place behind Sir Richard Branson's The People's Lottery bid for the next seven year licence, due to begin on 1 October 2001.

Sources close to Camelot revealed last night it believes it must get its original bid completely reassessed or even redrafted by a commission under a different chairman in order to beat TPL's not-for-profit bid. It has even threatened further legal action to intensify pressure on the commission.

TPL is said to have which outstripped Camelot's money for good causes offer by up to 6.9 per cent. Camelot hopes that by repeatedly attacking Dame Helena's credibility, she will be forced to resign or be asked to leave by the Government.

Jack Straw, the Home Secretary, warned that the five commissioners should "consider their positions" and "were on notice" after their court defeat. He was speaking for the Government, although the Department of Culture, Media and Sport believes the commissioners should not resign until the licence is awarded.

"Our best chance clearly is if the commissioners go and a new process is started," the source close to Camelot said. "But the other opportunity, of course, isn't for a rebidding process but just a fresh look at the existing bids, perhaps through eyes that are not biased towards a not-for-profit outlook... We do think that the chairman should go. After that, there could be a new process.

Sir George and the board, which includes executives from Camelot's shareholders Cadbury Schweppes, De La Rue, Racal-Thomson, and ICL, will also consider pulling out of the lottery bid at today's meeting.

This "nuclear option" is discounted by Camelot officials, but Sir George, as a former regulator in charge of the Independent Television Commission, could baulk at personally attacking another regulator. Camelot executives, however, expect he will support a formal demand for Dame Helena's resignation in a statement to be released tomorrow.

Camelot yesterday renewed their bitter complaints over the commission's behaviour after Mr Justice Richards ruled it had been "conspicuously unfair" in starting exclusive talks with Sir Richard on 23 August.