New York-based Sesame Workshop said in a statement that its own inquiry, including interviews with the now 23-year-old accuser, concluded that claims of underage sexual conduct against puppeteer Kevin Clash were unsubstantiated.

Clash, 52, the voice of Elmo for nearly three decades, acknowledged a past relationship with his accuser but said in a statement that the allegations against him were "false and defamatory."

"I am a gay man. I have never been ashamed of this or tried to hide it," Clash said.

"I had a relationship with the accuser. It was between two consenting adults, and I am deeply saddened that he is characterizing it as something other than what it was," he said.

He went on to say he was "taking a break" from Sesame Workshop to deal with the situation. His publicist declined to discuss the matter further.

The Sesame Workshop statement said Clash was "taking actions to protect his reputation" and that Sesame Workshop has "granted him a leave of absence to do so."

Separately, Clash was disciplined for violating company policy "regarding Internet usage," which a Sesame Workshop executive described as using the company's email to carry on personal communications. The executive spoke on condition of anonymity because she was not authorized to discuss the issue publicly.

Sesame Workshop said the allegations involving Clash came to its attention in June when the accuser first contacted the company by email.

"We took the allegation very seriously and took immediate action," the company said, adding that it met with the accuser twice and had "repeated communications with him." The company said it also confronted Clash, who denied the allegations.

Sesame Workshop was advised by its lawyers that "under these circumstances, there was no obligation" to notify police, and the company chose not to, the company executive said.

The official said the accuser and his lawyer had sought a settlement, but the company found "absolutely no evidence that the allegations were true."

'ABSOLUTELY FRAUDULENT'

The company went public with the matter on Monday only after receiving a query from celebrity news outlet TMZ.com, which said a source had furnished it with a copy of an email purportedly sent by Clash acknowledging that the relationship in question had begun when the accuser was 16.

"It's very curious (the accuser and his lawyer) told us they could not provide evidence, but suddenly they had it for TMZ," the executive said. "We believe it's absolutely fraudulent."

It was then that Clash asked for a leave of absence, and the company agreed, the executive said. "Kevin now really has to devote full time and attention to defending himself," she added. "He's hired a libel lawyer."

A lawyer for the accuser, who has not been publicly identified, did not immediately respond to a telephone request for comment.

Clash officially joined the "Sesame Street" cast in 1984, assuming the Elmo role that year.

The Elmo character debuted on the show in 1979. While Clash was the third performer to animate the child-like shaggy red monster, Sesame Workshop credits him with turning Elmo into the international sensation he became.

For now, producers promised that Elmo would remain on the show despite the absence of Clash, saying, "Elmo is bigger than any one person and will continue to be an integral part of 'Sesame Street.'"

(Editing by Cynthia Johnston and Will Dunham)

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