A fibre optic sensor for methane gas using the "differential absorption" referencing technique has been designed and constructed. Infra red light in the 1.66pm spectral region is absorbed by methane and this is the operating principle of the sensor. The system employs a novel LED, manufactured by GEC Marconi Ltd., as an infra red light source. The LED couples more power into single mode fibre than any other device of its type which is commercially available. The light is transmitted to a gas cell via single mode fibres and a fibre optic coupler, where some of it is absorbed according to the concentration of methane present. Two optical interference filters with transmissions at absorbing and non-absorbing spectral regions, respectively, are used in dual wavelength referencing mode to remove any interferences from non gas dependent parameters (e.g. dust in the cell). A calibration curve for the sensor is determined by plotting the values of the attenuated light signals against the corresponding concentrations of methane in the gas cell. A full characterisation of each component of the system was undertaken and the systems overall performance determined. The system has a limit of detection of 0.077% CH4. This is a factor of 18 below the specification requirement for the project, which is 1.25% CH4 in air (i.e. 25% of the Lower Explosive Limit). The= system has a resolution of 0.025% CH4 and shows both good repeatability and reproducibility. The main problem associated with the system is the critical temperature dependence of the optical interference filters, whose transmissions vary with temperature changes of 0.1°C and therefore affect the system stability.