Crossword Genius

Bug found in green sauce Penny refused (1,4)

Ross

I believe the answer is:

e coli

I'm a little stuck... Click here to teach me more about this clue!

'bug' is the definition.
(I've seen this before)

'green sauce penny refused' is the wordplay.
I cannot quite see how this works, but
'green' could be 'eco' (abbreviation for ecological) and 'eco' is located in the answer.
The remaining letters 'li' is a valid word which might be clued in a way I don't understand.
This may be the basis of the clue (or it may be nonsense).

'found in' is the link.

Can you help me to learn more?

(Other definitions for e coli that I've seen before include "Cause of internal problem" , "Bug that causes food poisoning" , "Nasty bug" , "Cause of infection" , "cause of illness" .)

I've seen this clue in The Times, The Sun and The Telegraph.
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