The UK show’s bosses are debating whether to drop a contestant from this season’s first episode after it emerged she already has a record contract in the U.S. Katie Waissel, 24, sailed through to the next round after Saturday night’s opening show, not telling producers Syco and Talkback Thames that she already has a two-record deal on a jazz label.

Simon Cowell, meanwhile, has banned performance-enhancing software from edited pre-recorded auditions. The X Factor has become embroiled in what newspapers are gleefully calling “the TV scandal of the year”. Cowell is anxious to shore up the talent show’s reputation before it transfers to the U.S. in Fall 2011. Viewers have complained to UK regulator Ofcom about Zimbabwean-born contestant Gamu Nhengu having her voice tweaked with Auto-Tune. Before this scandal, Nhengu was tipped as a potential winner. Programme-makers have admitted using Auto-Tune to help contestants when they sing sharp. Worse, it has emerged the software is also used to make no-hopers sound worse. “The integrity of the show is very important to him [Cowell] and so he told production that Auto-Tune cannot be used again,” one source told the Daily Mirror.

Syco has stressed that Auto-Tuning is never used in the live editions of the show, where votes are cast. “If anybody could prove that Auto-Tuning is used in the live shows, then they have a real problem,” one ITV insider tells me. “This won’t affect X Factor in the US unless there are more accusations of cheating. Until now, Simon’s view has been that all publicity is good publicity. The importance of the US X Factor for Fox cannot be overstated.”

Admitting to Auto-Tuning some contestants’ voices is not going to sink the show. Saturday night’s show drew a record peak audience of 11.95 million viewers. “It won’t dent it in the slightest,” one light-entertainment TV producer tells me. “It’s a ratings juggernaut – and a bit of light scandal proves that this show is human and can make the odd mistake.”

But a steady drip of scandal could eat into the show’s credibility with US viewers. Audition audience members complain about having to give standing ovations on cue that can be dropped in whenever the producers see fit. Judges are prompted as to what to say, complained one audience member. These days, the thing people most remember about 1950s quiz show Twenty One was that producers tipped off contestant Charles Van Doren questions in advance.