US bid to force foreign sell-offs

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The dispute over Dubai's proposed takeover of operations at five major US portswidened yesterday, as a top congressional Republican called for a law banning foreign ownership of infrastructure deemed "critical to national security".

If approved, the legislation being drafted by Duncan Hunter, the chairman of the House Armed Services Committee, would not only kill the £4bn deal by which DP World, owned by the United Arab Emirates government, would take over the British-owned P&O Ports that runs the ports. It would theoretically also require other foreign firms to sell-off holdings here in shipping, transport and other sectors.

Mr Hunter's move heightens the political difficulties of the White House, which has been forced to engineer a 45-day delay in the finalisation of the deal, as it faces a revolt by Republicans and Democrats on the issue.

President George Bush has said he will veto any bill that blocks the takeover, warning such a step would send the worst possible signal to the Arab world. But Americans disapprove of the deal by a four to one margin, according to aUSA Today poll yesterday.

On Capitol Hill, 90 House members are co-sponsoring a separate Bill that would suspend the takeover. Similar pressures are growing in the Republican-controlled Senate. The US government review process that initially allowed the DP World deal "is no longer acceptable", said theRepublican senator Richard Shelby. "Everything in this country can't be for sale."