By Randall Mikkelsen

WASHINGTON, Oct 29 (Reuters) - A Bush administration official whose department had government workers pose as journalists in a news conference has been dropped from a planned new job as media chief for the top U.S. spy agency.

The Office of the Director of National Intelligence said on Monday that John Philbin, who until last week was external affairs director of the Federal Emergency Management Agency, would not be taking up a similar job with the intelligence office.

"Mr. Philbin is not, nor is he scheduled to be, the director of public affairs for the Office of the Director of National Intelligence," the office said in a written statement.

Philbin had accepted the intelligence job several weeks ago and had been due to start on Monday, office spokesman Ross Feinstein said. He declined to give additional details.

FEMA employees last Tuesday posed as reporters at a news conference in Washington about the Southern California wildfires. The briefing was called on short notice and no journalists were on hand when it started.

Instead, FEMA deputy director Harvey Johnson stood before a FEMA camera feeding live images to television networks and took questions from agency employees posing as reporters.

The Bush administration, which has been accused on several occasions of masking public relations efforts as journalism, sharply denounced the misrepresentation after it became public last Friday.

National Intelligence Director Mike McConnell has also faced congressional challenges to his own credibility over misstatements as he pushes for permanent authority to eavesdrop in international terrorism investigations.

Philbin, in a Washington Post article published on Saturday, expressed regret over the incident. "It was absolutely a bad decision ... I should have stopped it," he said.

Asked about Philbin, White House spokesman Tony Fratto said, "We don't comment on personnel decisions."

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