A former council leader has denied rumours of an affair with his top officer.

Tory Tim Dice was giving evidence at an employment tribunal hearing chief executive Sheryl Grady's claim against Worthing Borough Council.

Miss Grady, 47, claims she was left ill by sexist treatment at work and is seeking compensation.

She is taking action against the council and its former Lib Dem leader, Sheila Player, whom she alleges referred to her disparagingly as "Goldilocks".

Mr Dice said: "There were rumours and gossip among the staff that the chief executive and I were having an affair. These were totally untrue and are totally refuted."

Mr Dice, who stepped down from the council at the last election, was Conservative council leader when Miss Grady was appointed chief executive in 2000.

Miss Grady, who lives in Hove, broke down in tears as she was cross-examined at the tribunal by the council's barrister, Martin Downs.

The Brighton hearing was adjourned after she told how the stress of the last 12 months had made her ill.

She went on sick leave from her £80,000-a-year job last December when the council launched an investigation into her style of management. It followed complaints from members of staff accusing Miss Grady of bullying, inducing stress and creating an atmosphere of blame.

But she alleged staff were "actively encouraged to complain" against her by Miss Player, who lost her seat in May's local elections. Miss Grady said she was treated unfairly in the ensuing disciplinary proceedings because she was a woman, denied access to files to support her case and not given a fair hearing.

Choking back tears, Miss Grady said: "I had a doctor's note saying I was too ill to give evidence in the disciplinary proceedings. I asked the council then to delay the proceedings until I was well but they said no and went ahead anyway.

"I was not allowed to comment or be involved until a long way down the line."

She claimed a male colleague had been treated more fairly in similar circumstances.

Miss Grady said: "Sheila Player constantly made rude comments. Very early on she rang me and said, 'We need a man to keep the chief officers under control'.

"That was the tenor of her behaviour. She was sometimes very nice but sometimes very unpleasant to me. She was not like that with male officers, in my view."

Visibly shaking, she said: "I was very ill with the stress. My doctor says I am only just well enough to go through with this tribunal."

Mr Dice told the tribunal he had heard Miss Player saying she did not want Miss Grady as chief executive.

He said the Liberal Democrat group had failed to stand and clap with other councillors when Miss Grady's appointment as chief executive was announced.

The hearing continues.