The young female volunteer in front of me could not suppress an embarrassed giggle as she sat there wearing a ski mask, wraparound sunglasses, an oversized graduation gown and a pair of white socks, a large laminated sheet hung around her neck displaying her participant number.

Then things got even weirder. Professor Richard Wiseman knocked on the door to collect our volunteer. He accompanied her into a large room where she was instructed to sit in a chair facing the wall and do nothing for 15 minutes or so. Professional medium Mrs Patricia Putt was then brought into the room and sat down at a small table around 12 feet away. Sometimes Mrs Putt would request that a volunteer read a pre-specified short passage, as she had found from past experience that often "the Spirit enters and makes contact through the sound of the sitter's voice". After that, no talking was allowed whatsoever as our medium wrote down a "reading" describing the volunteer using her alleged paranormal abilities. At the end of the reading, Mrs Putt left the room and the volunteer was allowed to change back into somewhat more conventional garb and given a reminder to return later in the day for the all-important judging phase.

What was going on here? By the standards of the Anomalistic Psychology Research Unit, this was not really that weird at all. Mrs Putt is a professional medium who has appeared on TV several times, as well as being the subject of several magazine and newspaper articles. No doubt convinced of her own abilities, she had contacted the James Randi Educational Foundation with a view to proving her abilities and thus claiming the prize of one million dollars on offer to anyone who can demonstrate paranormal powers under controlled conditions. Not unreasonably, Randi often requires applicants to first pass a preliminary test carried out by associates of the JREF before they are allowed to proceed to the formal test that will determine whether or not they become overnight millionaires. The test we were carrying out on Wednesday last week at Goldsmiths was one such preliminary test. To date, no one had ever passed a preliminary test. Would the outcome of our latest test make history by producing a positive result?

The JREF challenge can be traced back to 1964 when arch-sceptic, magician and debunker Randi offered $1,000 of his own money to anyone who could prove a paranormal claim under controlled conditions. Other donors quickly came forward to support Randi's efforts and the total prize available has stood at $1m for many years now. Despite the fact that the world is full of people claiming to possess abilities that defy conventional scientific understanding, only a minuscule proportion of them ever put themselves forward for the challenge. A minuscule proportion of a very large number still amounts to several hundred applicants, of course, but this does raise the question of why the vast majority of psychic claimants shun the challenge altogether. One commonly cited reason is that the challenge is fixed by Randi in such a way that no one would ever be able to claim the prize. True believers in the paranormal often have a deep mistrust of Randi and, indeed, he has been likened to Satan himself on more than one occasion.

Let's examine that claim a little more closely – the one about the challenge being rigged, not the one about Randi being Satan. I have personally been involved in preliminary tests for JREF on several occasions, including a double-blind test of dowsers (featured in Richard Dawkins' TV series Enemies of Reason) and a test of Derek Ogilvie's claim that he could read the minds of babies and toddlers (featured in the Extraordinary People series on Five). In both cases, no evidence of any paranormal abilities was obtained. Results were exactly at chance level. But the thing that struck me very forcibly in setting up the protocols for these tests was the extraordinary time and effort that goes into ensuring that the tests are not only well-controlled from a scientific point of view but also deemed to be fair by the claimants. There is simply no point in carrying out the test if the claimants are not happy with the conditions under which they are being tested. Indeed, all claimants must sign a written statement confirming that they agree that the test is fair before it goes ahead. That does not mean, of course, that claimants will not change their minds after they have taken the test and failed it. It is a rare claimant who does not come up with excuses to explain away their failure.

To those who continue to maintain that the JREF challenge is rigged against honest and genuine psychic claimants, I say this: Go for the challenge anyway. You will be fully involved in drawing up and approving the final protocol and can insist that the conditions are to your liking, provided that the agreed protocol is well controlled from a scientific perspective. If you pass the test under those conditions and Randi refuses to acknowledge your success and award you the prize money, expose him to the world as the dishonest charlatan that you would then have proved him to be. I issue that challenge with confidence because I am convinced that the allegation that Randi rigs these tests in any way is without foundation.

It is also worth noting that Randi is never present at the preliminary tests unless this is specifically requested by the applicant. It is therefore difficult to see how he could influence the outcome of a test. I remember on one occasion being involved in drawing up a test of a psychic where this kind of paranoia was amply demonstrated. During the protocol development stage, it was suggested that a suitable means to decide randomly between two possible outcomes, as required by the method to be used, would be to toss a coin. Needless to say, the crucial coin toss would be witnessed by all interested parties and filmed to ensure that it was fair. One supporter of the psychic with a particularly intense hatred of Randi immediately objected to this suggestion, pointing out that Randi is a skilled conjuror and as such would know dozens of ways to make the coin fall the way he wanted it to. That may be true, but as Randi would be in Florida when the coin toss was taking place, it did not seem reasonable to be too concerned about that issue. As far as I was concerned, if Randi could make a coin fall the way he wanted it to while on the opposite side of the Atlantic, he deserved to keep the million dollars.

The test of Mrs Putt was no exception when it came to the time and effort that went into drawing up the protocol and preparing for the test. The draft protocol went through many revisions, all of which had to be approved by JREF staff and, most importantly, Mrs Putt herself. The final protocol required that Mrs Putt write down a reading for each of 10 volunteers she had never met before, all of whom had to wear the bizarre attire described above and sit facing away from her to ensure that the reading did not include any reference to the physical appearance of the volunteer. Once all 10 volunteers had had a reading done, they were called back and each issued with a set of all the readings, each set in a different, randomised order. At this point, of course, they did not know which reading had been produced specifically for them. Their task was simple. They had to read all ten readings and decide which one was most applicable to them. If Mrs Putt had the ability she believed she had, the majority of the volunteers should easily be able to identify their own reading. If five or more of the volunteers chose the correct reading, Mrs Putt would be deemed to have passed the test and arrangements would be made for her to proceed to the formal Million Dollar Challenge.

It sounds simple but the attention to detail that is required to prepare and carry out such tests in a properly controlled way is considerable. I would like to express my thanks here not only to Richard Wiseman but to all the other members of the team (Panka Juhasz, James Munroe, Suzanne Barbieri, and Fabio Tartarini) who ensured that things ran smoothly on the day. Although it sounds like a simple test, there are many subtle factors that could bias the results one way or the other that need to be taken into account. For example, Mrs Putt agreed not to include in her readings anything that might give an indication of the position of the reading in the series (e.g. "Feeling more confident with this one" would indicate that this could not possibly be the reading for the first volunteer). She also agreed not to make any reference to events that she might overhear outside the testing area (e.g. had there been the sound of children playing during one reading and reference was made to "happy children" in the reading itself). She agreed that all of the participants could be selected from the same ethnic group (Caucasian), be of the same gender (female), and within a restricted age range (18-30). This is because a person's voice gives away much information regarding such factors. These are just a few examples of the kinds of factors given careful consideration in drawing up the protocol.

Every session was recorded on video, as was the judging phase and the final phase of tallying up the number of hits. There are many sceptics who, quite wrongly in my opinion, believe that all psychic claimants are deliberate frauds. As far as I can tell, the vast majority of people claiming to be psychic genuinely believe that they are. However, it is also true that the history of psychical research is peppered with fraudulent claimants. For this reason, even if one has no reason to doubt the honesty and sincerity of a claimant, conditions must still be such that the possibility of fraud are kept to an absolute minimum. Sceptics would, quite rightly, go over the details of any test that appeared to produce positive results with a fine toothcomb looking for methodological loopholes. It works the other way too. The video record can be used to assure unsuccessful claimants that the protocol was properly followed.

Did we make history last week? Is Mrs Putt now preparing to face that final challenge? The chosen readings were compared with the actual readings by Richard Wiseman and Mrs Putt together, with several observers present and the whole procedure recorded. The first volunteer did not choose the reading that had been produced for her. Neither did the second. Or the third. By chance alone, the most likely outcome was for one hit out of ten. Unfortunately for Mrs Putt, every single volunteer chose a reading that had not been written for them. It looks like JREF's million dollars are safe for the time being.

Mrs Putt declared herself "gobsmacked" by the result. She did not try to make any excuses for her failure, in sharp contrast to many others who have found themselves in the same situation. She had been a perfect subject from start to finish from our point of view, cooperative and friendly throughout. We salute her for having the courage of her convictions and for accepting the outcome with such grace.

Chris French is a professor of psychology at Goldsmiths, where he heads the Anomalistic Psychology Research Unit. He edits the [UK] Skeptic magazine

STOP PRESS The day after this column was submitted for publication, Mrs Putt had reflected upon the test and decided that the protocol had put too many barriers in her way for her to demonstrate her psychic ability. In an email to Alison Smith of JREF, she explained, "With them [the volunteers] being bound from head to foot like black mummies, they themselves felt tied so were not really free to link with Spirit making my work a great deal more difficult." For the record, no volunteers were "bound" and Mrs Putt did not speak to any of the volunteers after the test. One can only assume that she picked up on their feelings of being "tied" via her psychic powers.