The Labour leader told the Independent on Sunday that an agreement had been reached "which met all the demands we have made", including the right to review all aspects of the project in government.
Asked if he was surprised at the spectacle of Mr Heseltine coming cap- in-hand, he replied: "Yes. I suppose it might have looked odd that he was coming to us in this way, especially as he makes so much, in normal circumstances, of asking us, where is the money going to come from?"
He added: "At one stage we were being asked to sign a blank cheque. We were simply not prepared to do that given all the priorities there will be and given that we have our own plans for the National Lottery."
The claims caused consternation in the Government which yesterday sought to present the deal as a compromise between the two parties, while sources argued that Labour had largely brought about last week's crisis.
The conditions laid out by Mr Blair and Jack Cunningham, shadow spokesman on National Heritage, were that there is a cap on the overall budget, that the contingency fund should be exclusively for unforeseen events and that Labour retains the right to review the whole project in office.
Privately, Labour says Mr Heseltine took a highly aggressive stance but was forced to back down. When they met last Thursday, he was given only 25 minutes by Mr Blair, because two business leaders were waiting for a meeting.
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