A MERSEYSIDE council denied “covering up” allegations that James Bulger’s killer, Jon Venables, had sex with a female member of prison staff months before he was released on parole.

A newspaper had claimed that Venables had sex with the female employee at the Red Bank secure unit run by St Helens Council in 2000 when he was just 17 years old.

Venables, who was convicted of murdering two- year-old James in November, 1993, was released on parole months after the alleged sexual encounter in a detached house in the grounds of the secure site in Newton-le-Willows.

The woman alleged to have sex with Venables was subsequently suspended and never returned to work at Red Bank.

Jon Venables, now 27, was recalled to prison under life licence last February and is serving two years in prison after admitting paedophile pornography offences last July.

A council spokesman said: “St Helens Council totally denies any cover-up.

“Any allegations were thoroughly investigated by an independent team on the order of the Home Office and chaired by Arthur de Frischling, a retired prison governor.”