Applying for another PhD after dropping out 4 years ago, should I use my previous PhD supervisor or undergraduate supervisor for a reference? I dropped out of my previous PhD 4 years ago, because my UK institution had a four year maximum time limit for completion which I didn't meet due to my mental health issues. I'm now recovered and have been working for the last three years in a research position at another university. I would now like to apply to do my PhD part-time in the department where I work. 

I think my previous supervisor would give me a reasonable reference as he was sympathetic to my issues, but I am concerned about how it would look to use an academic reference from a qualification I didn't complete. My only alternative would be a generic reference from my undergraduate study director who will not even remember me as I only met him a handful of times and I completed that degree ten years ago. 

Which would look best?
Assuming your resume includes the fact that you spent 4 years doing PhD research and were not awarded the degree, I don't see the problem with asking your former supervisor for a reference. I assume this is the case, because you still need to account for the 4 years in your work history. In that case, your supervisor's letter could be valuable in explaining that you weren't told to leave the program due to other concerning issues; this was for health reasons. 

But here's the key: can your former supervisor write a strong letter of recommendation? Ask him or her explicitly whether they can do that. If not, move on to a different reference.

Think about any other references you might be able to call upon in your current position as an alternative. Do they need to be professors? Have you worked with research associates or other professionals who can vouch for you?