A scheme to transform Hackney Stadium, built in 1932, into what is being billed as Europe's finest greyhound racing venue is back on track following a successful pounds 3m rights issue by its City backers.

The plans provide a marked contrast with the cloth-cap image of greyhound racing left over from the inter-war years; a high class restaurant and hospitality boxes will be among the elements designed to attract new lucrative corporate business and American tourists.

The ambitious project had been dogged by delays. Fleetfoot Racing, the stadium owner, has been beset with construction problems, internal disagreements and financial concerns.

The original pounds 14m scheme to develop the neglected stadium in Waterden Road, Hackney Wick, was promoted two years ago by ex-Lloyds broker and racing journalist Robert Parker, the former managing director of Fleetfoot Racing.

Mr Parker left the company in July and the proposals have undergone substantial revision since then requiring an extra pounds 3m. Fleetfoot's operations director, Stephen Rea, is confident the extra cash raised by the rights issue will enable the redeveloped stadium to open next June. It will be known as the Embassy London Stadium and be able to accommodate 5,000 spectators.

The main east stand will have two tiers instead of three, with a fully glazed facade overlooking the track and a 550-seat restaurant. The site will be landscaped.

In inter-war years the dog track attracted regular attendances of 25,000. The west stand has already been rebuilt but it will be transformed into a corporate facility, with a high-class restaurant and 22 hospitality boxes. They will cost a fraction of those at other sporting attractions, such as horse racing. Work will commence next month.

Fleetfoot Racing has been streamlined and won back the confidence of its backers. 'We have been dogged by problems up to now,' said Mr Rea. 'But now we are delighted by the equity injection. We aim to target the tourist market in a big way, with visitors from all over the world being offered a leisure facility that is not currently available anyhwere in Europe.' The companies involved in the rights issue include Rothschild, Henderson Venture Managers and Samuel Montagu.

Fleetfoot director Stephen Welton - also of Henderson Venture Managers - said: 'The stadium will have both quality and capacity and our plans now are much better thought out. We want to expand the appeal of greyhound racing to tourists, especially the Americans, and those who are not aware of it. We shall also continue to support traditional spectators.'

Top trainers, including John Quinn, have been asked to provide dogs. The stadium will be accessible from the M11 link, now under construction; Sainsbury has planning permission to develop a site next door which would bring considerable road improvements. Fleetfoot also hopes an international passenger railway station will be built at nearby Stratford.

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