The self-consistent simulation of the electron beam interaction was performed in the presence of a lossy dielectric layer in the smooth-wall beam duct of a gyrotron oscillator. For this purpose, the linear and spectral code TWANGlinspec was extended. In this code, the local transverse structure of the TE mode is adapted to the solution of the complex cold dispersion relation of an infinite, homogeneous, dielectric coated cylindrical waveguide. Before considering the realistic situation, the validity of the TE pure mode (E-z = 0) assumed in TWANGlinspec had to be assessed for SiC or BeOSiC materials. The effect of the dielectric layer on the parasitic starting current is large for parasitic oscillations localized at the end of the beam duct and in the so-called spacer region. For the realistic case, the geometry of the dual frequency gyrotron for the Tokamak a Configuration Variable was considered, and the effect of a dielectric layer was numerically investigated. The electron beam velocity spread was also included in the simulations. The result is that in such conditions, the parasitic oscillation starting currents are increased above the operating beam current. The observation of these spurious modes would therefore not be expected.