Sesame Workshop said puppeteer Kevin Clash denies the accusations, which were first made in June by a man now 23.

"We took the allegation very seriously and took immediate action," Sesame Workshop said in a statement issued Monday, US time. "We met with the accuser twice and had repeated communications with him. We met with Kevin, who denied the accusation."

The organisation described the relationship as personal and "unrelated to the workplace." Its investigation found the allegation of underage conduct to be unsubstantiated. But it said Clash exercised "poor judgment" and was disciplined for violating company policy regarding Internet usage. It offered no details.

"I had a relationship with (the accuser)," Clash told TMZ. "It was between two consenting adults and I am deeply saddened that he is trying to make it into something it was not."

Sex with a person under 17 is a felony in New York if the perpetrator is at least 21. It was unclear where the relationship took place, and there is no record of any criminal charge against Clash in the state.

At his request, Clash has been granted a leave of absence in order to "protect his reputation," Sesame Workshop said.

No further explanation was provided, nor was the duration of his leave specified.

"Elmo is bigger than any one person and will continue to be an integral part of 'Sesame Street' to engage, educate and inspire children around the world, as it has for 40 years," Sesame Workshop said in its statement.

"Sesame Street" is currently in production, but other puppeteers are prepared to fill in for Clash during his absence, according to a person close to the show who spoke on condition of anonymity because that person was not authorized to publicly discuss details about the show's production.

"Elmo will still be a part of the shows being produced," that person said.

In addition to his role as Elmo, Clash also serves as the show's senior Muppet coordinator and Muppet captain.

Clash, the 52-year-old divorced father of a grown daughter, has been a puppeteer for "Sesame Street" since 1984. It was then that he was handed the fuzzy red puppet with ping-pong-ball eyes and asked to come up with a voice for him. Clash transformed the character, which had been a marginal member of the Muppets gang for a number of years, into a major star rivaling Big Bird as the face of "Sesame Street."

Among children and adults alike, Elmo was quickly embraced as a frolicsome child with a high-pitched giggle and a tendency to speak of himself in the third person.

"I would love to be totally like Elmo," Clash said in a 1997 interview with The Associated Press. "He is playful and direct and positive."

Besides "Sesame Street," Elmo has made guest appearances on dozens of TV shows. He starred in the 1999 feature film "Elmo in Grouchland." And he has inspired a vast product line, including the Tickle Me Elmo doll, which created a sales sensation with its introduction in 1996.

Along the way, Clash has become a star in his own right. In 2006, he published an autobiography, "My Life as a Furry Red Monster," and was the subject of the 2011 documentary "Being Elmo: A Puppeteer's Journey."

- AP