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A government body was a "passive participant" in allowing abuse of taxpayers' money, the RHI inquiry has been told.

The criticism was levelled at Ofgem which was administering the scheme.

It centred on a failure to clearly tell the NI department responsible for RHI of a potential loophole.

It made it permissible for multiple boilers on a single site to earn large sums of public subsidy.

Giving evidence, Ofgem (Office of Gas and Electricity Markets) official Edmund Ward accepted that the warning could have been made clearer.

Ofgem suggested to the Department of Enterprise, Trade and Investment (DETI) that it come up with a definition of a "heating system" which would have addressed the issue.

But when that was not done, Ofgem went ahead and accredited multiple boilers on a single site as long as they were on separate heating systems.

It meant each one could draw down the highest subsidy rate.

The inquiry was told that analysis showed that 75% of installations in Northern Ireland were part of a multiple boiler system.

The inquiry was told the advice to DETI had been "indirect" in nature and officials running the scheme in Northern Ireland did not understand its significance.

In fact, several key officials running the scheme in Northern Ireland thought multiple boilers on the same site were treated as a combined installation which attracted a lower subsidy.

Panel member Dame Una O'Brien said the explanation offered by Ofgem was "very hard to swallow".

She said Ofgem had been a "passive participant in allowing the abuse of taxpayers' money" and understanding how was a "crucial point" for the inquiry team.

Inquiry chairman Sir Patrick Coghlin said Ofgem should have done more to explain that the issue of multiple boilers was a "potentially exploitative option that people might take up".

Mr Ward accepted that it could have been made "much clearer".

Sir Patrick said a "more robust" approach would have been more appropriate.

The inquiry was told that neither DETI nor the equivalent department running a parallel scheme in Britain had acted on Ofgem's advice to define a heating system.