Failed fuel refers to the breach in the fuel-clad of an irradiated fuel assembly in a nuclear reactor. Neutron detection or gamma detection is commonly used in Failed Fuel Detection and Locating (FFDL) system to monitor the activity of the coolant. Though these methods offer specific advantages under different conditions of the coolant, providing both types of detectors in FFDL system is impractical. This limitation is the motivation for the detector system developed in the present work. In the present work, effort has been made for realising a detector system for simultaneous measurement of neutron and gamma activity of the coolant, thus offering a two-parameter basis for failed fuel detection. NE213 liquid scintillator was chosen for this work as it has good detection capability for both neutrons and gammas. Additionally, the neutrons and gammas interacting with NE213 detector can be separated based on pulse shape discrimination. The work reported in this thesis includes fabrication details and different steps followed in assembling the NE213 detector. Details of experimental set-up developed for pulse height analysis and pulse shape analysis are covered. Results of experiments carried out to study the response of the NE213 detector to gamma and neutron sources using pulse height analyser are presented. The absolute gamma efficiency and relative gamma efficiency of NE213 detector are calculated. Neutron–gamma separation capability of NE213 detector based pulse shape analysis system is reported. Application of the developed detector system to analyse the coolant activity in FFDL system in a reactor is described. Response of the detector is compared with the existing FFDL system at different power levels of the reactor. Since failed fuel is a rare event, it was simulated using neutron and gamma sources. Pulse shape analysis spectra obtained under simulated failed fuel condition are presented.