Drop Dome, Mandelson warned

Millennium project seen as incompatible with minister's new DTI post

PRESSURE is growing on the new Secretary of State for Trade and Industry, Peter Mandelson, to relinquish his other role as overseer of sponsorship for the flagship Millennium Dome project amid concern about a possible clash of interests.

The former Minister Without Portfolio and close aide to the Prime Minister, Tony Blair, was moved into the hot seat at the Department of Trade and Industry in last week's Government reshuffle. Yet, despite the rigours and pressures of the new job, which covers everything from foreign trade to regulating mergers and takeovers, Mr Mandelson maintained control over his pet project, the Dome.

"Mr Mandelson should be very careful when taking decisions about companies allied to the Dome project. I am sure there will be a lot of people watching," said John Redwood, the shadow Trade and Industry Secretary. "It might be better to drop the Dome sponsorship role altogether."

Privately, some of the Dome's Commissioners have also expressed fears about the adverse publicity that could be generated from Mr Mandelson holding the two posts. His office was contacted for comment but failed to respond.

The Dome is being financed through pounds 150m in corporate sponsorship, pounds 194m in commercial revenue, pounds 15m in disposal proceeds and pounds 399m from a grant from the National Lottery. The project has been controversial throughout because of the quantity of money being channelled in to what some see as a white elephant in the making.

Nevertheless, some of Britain's biggest companies are backing the project. The so called "founding partners" of the New Millennium Experience Company that is overseeing it are BT, BSkyB, part-owned by Rupert Murdoch's News Corporation, recruitment agency Manpower and the supermarket chain Tesco. Other sponsors are the airport operator BAA and British Airways, whose chief executive, Bob Ayling, is also chairman of the company that runs the Dome project.

Although may be just a matter of coincidence, Mr Mandelson's predecessor at the DTI, Margaret Beckett, made several decisions that directly benefited the bottom line of corporate sponsors of the Dome.

BT committed pounds 12m to the project last February and the following month Mrs Beckett reversed a Tory ban and gave BT the nod to compete with cable television companies in offering broadcast services.

BAA, which has promised to donate pounds 6m to the Dome, was elated after the Government gave final clearance this week to widen the most congested part of the M25 motorway between Gatwick and Heathrow, despite Labour's opposition to the scheme before it came to power. British Airways was also in favour of the road widening scheme.

But Tesco and Marks and Spencer, which have pledged pounds 24m to the Dome between them, would have been disappointed this week. The Office of Fair Trading made a surprise announcement that it would be investigating allegations that the largest supermarket chains are abusing their market power against the public interest.

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