County Hall owners hit back at 'scurrilous' Saatchi in gallery dispute

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Lawyers representing the family-owned Shirayama Shokusan corporation told the High Court that Mr Saatchi, 62, plans to open a museum of photography or work by new young artists at County Hall once he moves his flagship collection to Chelsea in 2007.

The claim comes after the former advertising magnate last month cemented his very public falling out with the building's landlord by alleging an "endless campaign of petty unpleasantness" by Makota Okamoto, head of Shirayama's European operation. Christopher Pymont QC, representing Mr Okamoto and Shirayama, yesterday called Mr Saatchi's remarks "scurrilous". The barrister told the High Court that despite Mr Saatchi's description of his lease as "untenable", the art collector has plans to use the gallery space as "either a low-cost museum of photography or a museum of very new young artists".

Last night representatives of Mr Saatchi refused to comment on whether he intended to continue his 30-year lease at County Hall.

Shirayama, a Japanese property investment company which bought the building opposite the Houses of Parliament for £60m in 1993, is seeking to end the lease immediately by claiming that the Saatchi Gallery repeatedly exceeded its rights in the building. This allegedly included placing art works and signs outside the space rented by the gallery and using a corridor that was not part of the lease as a cloakroom.

Shirayama is seeking to end the lease on the ground that the gallery breached a requirement to charge a minimum amount per ticket by arranging a "two for the price of one" offer with the magazineTime Out.

Relations between the two sides soured soon after the opening of the gallery in April 2003 when Mr Okamoto is claimed by Mr Saatchi to have sworn at gallery staff. The locks to a disabled lavatory that the gallery used were changed by Mr Okamoto, forcing disabled visitors to use lavatories in an adjoining hotel.

Mr Saatchi plans to move his collection to the Duke of York's Headquarters in King's Road, Chelsea.

The case continues.