A shop worker has appeared before magistrates on a fraud charge after attempting to falsely claim a £1m lottery prize belonging to a 77-year-old woman.

When Maureen Holt went into the convenience store in Oldham, Greater Manchester, with her winning ticket, Farrakh Nizzar, 20, told her she had won nothing.

He told her he would discard the ticket, but later phoned a lottery hotline to say he had bought the lucky jackpot ticket from the store, according to the Manchester Evening News.

His attempted fraud unravelled when it was discovered that it had been bought on Maureen Holt's Tesco Clubcard at a Tesco Extra store in the town, rather than at Best One Convenience Store, where he worked. Camelot confirmed that a National Lottery retailer in Oldham had been suspended, pending an internal investigation.

Holt and her 80-year-old husband, Fred, had been on holiday when the EuroMillions UK Millionaire Raffle draw in June matched their numbers. "I just can't believe he did this, but at least he got caught," she said. "This money will mean my husband can finally give up work and we can enjoy our retirement."

At Oldham magistrates court on Tuesday, Nizzar pleaded guilty to fraud by false representation, court officials confirmed.

The defendant, of Crumpsall, Manchester, has been remanded in custody before his sentencing hearing at Manchester Minshull Street crown court on 20 August.

Police said they were made aware last month of allegations surrounding the attempt to claim a prize from Camelot, operator of the National Lottery.

Detective Inspector Danny Inglis said: "We have worked very closely with Camelot throughout this investigation and will continue to do so during the remainder of the judicial process."

A spokesman for Camelot said it had suspended a National Lottery retailer in Oldham pending an internal investigation.

He said: "I can confirm that we believe we have identified the genuine owner of the EuroMillions UK Millionaire Raffle prize from the draw on Friday 22 June 2012. We are aware of the charges that Farrakh Nizzar pleaded guilty to yesterday.

"However, given the ongoing legal process and the fact that Mr Nizzar is yet to be sentenced, it would be inappropriate for Camelot to comment further on this case."

The spokesman added: "Such allegations are very rare. We work with approaching 30,000 retailers throughout the UK, with millions of transactions taking place every day."

Camelot said that prize claimants had to go through a number of security procedures as part of the ticket validation process to determine whether they were the rightful owner.

All players of the National Lottery prize draws are encouraged to sign the back of their tickets and check if they have won before presenting them at shops.