> I have a security officer that has raised the issue regarding free [Putty]
> software.

That's unusually paranoid. What's his beef? Just that it's open source? 
 
> Has anyone encounterd security issues with Putty beyond the Release 0.60?
> I am looking for documented problems.

None in more than 100 customers. Ain't broke, don't fix it. 

> I am also interested in what I could use as a fee based product to replace
> Putty.

SSHTectia will sell you a commercial version of ssh which really doesn't do 
anything more than Putty does (other than have someone to sue). You could use 
RDP to connect to a Windows virtual desktop or Linux virtual desktop and use 
the included ssh (hope he doesn't know that that's open source too). I believe 
Hummingbird will sell you a version of their tools that are ssh-enabled. 

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