THE Jarvis boss being investigated over allegations that he took a £1 million bribe has resigned, the company confirmed.

Colin Skellett, non-executive chairman of Jarvis Plc, stepped down from the company's board because of a police investigation unrelated to his role in the rail company.

Mr Skellett, 57, was arrested at his home last week and questioned about an alleged fraud from Wessex Water, where he is chairman.

The alleged fraud occurred when Wessex, formerly controlled by corrupt US energy giant Enron, was sold to Malaysian firm YTL for £1.24 billion, earlier this year. The Bath-based water company has insisted that Mr Skellett will continue in his current role.

But at Jarvis, a York-based subsidiary of which is being investigated for its role in the Potters Bar rail crash, directors "with great regret" accepted his resignation.

Seven people died and dozens were injured after faulty points on the East Coast Main Line led to a West Anglia Great Northern Train careering off the track.

A Jarvis spokesman said: "The board of Jarvis plc can today confirm that it has, with great regret, accepted the resignation of its non-executive chairman, Colin Skellett, from the board of the company.

"Mr Skellett has indicated that, given the ongoing police investigation into the sale of Wessex Water it is right that at this time he should step down from the board of a publicly-listed company.

"In agreeing with him, the board wishes to place on record its sincere thanks to Colin for the significant contribution which he has made to the company.

"The board is confident that Colin Skellett will be cleared of the allegation and wishes him and his family well in the future."

Updated: 12:22 Thursday, August 29, 2002