Despair for Dome as Manchester wins supercasino

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The decision to award the UK's first supercasino to Manchester surprised ministers and came as a relief to Tony Blair by preventing renewed sleaze allegations over the bid by the Millennium Dome at Greenwich.

However, it thrust a South African entrepreneur into the spotlight last night. Sol Kerzner, who developed the Sun City resort in Bophuthatswana, had been the preferred operator for the Manchester casino in 2004. He would have operated the casino in the Dome, if Greenwich had won the bid.

The choice of the operator of the supercasino in East Manchester, near the Manchester City FC ground, will be opened to a fresh round of competition, but Mr Kerzner will now be seen in pole position.

As Manchester celebrated its unexpected success, senior Labour MPs privately said last night the controversy over John Prescott's visit to the Anschutz ranch and the gift of a cowboy outfit of boots and a hat may have cost Greenwich the contest.

Mr Prescott, who denied any involvement in the bid for the casino by Philip Anschutz, owner of the Dome, was attending a Labour national executive meeting when members heard the news by text message. According to officials, Tessa Jowell, the Culture Secretary, was stunned by Manchester's win when she was handed the recommendation at 9am, two hours before it was officially released. "Greenwich came out top in the initial assessment," said one former minister. "Manchester came bottom. There are very real questions about why that changed."

Labour and Conservative MPs said the independent advisory panel had plumped for Manchester to avoid a political controversy - a charge denied later by the panel. "Manchester didn't expect to win this bid," said one senior Conservative source. "It was obviously down to politics."

The decision - with the announcement of eight local and eight large casinos - will have to be ratified by the Commons in March. Some MPs warned they would vote against the Government but the Tories will vote for the package, having advocated a single pilot scheme for a supercasino. It cannot be amended and is certain to go through with a large majority.

Ms Jowell said there would be no "Las Vegas-style tricks of the trade" such as alcohol or oxygen pumped into playing areas to make the punters gamble more, stating: "Las Vegas is not coming to Great Britain." But she was privately criticised by some MPs for being too tentative, and bowing to pressure by Tories and The Daily Mail campaign against gambling.

The Culture Secretary strongly denied claims that the award to Manchester would be quickly followed by more supercasinos. She ruled out any more licences in this Parliament .

Manchester's success prompted a sharp attack on the city from Blackpool, which is still smarting from the Labour Party's decision to move its annual conference from the resort to Manchester. "If Manchester steals any more of our clothes they might as well just take our wardrobe," said Alan Cavill, head of the town council's corporate policy unit.

The schedule

* The Gambling Act 2005 allows one regional 'supercasino' and eight large and eight small casinos. 27 local authorities apply for the right to host the super-casino

* May 2006: Supercasino shortlist announced, including Blackpool, Cardiff, Glasgow, Greenwich, Manchester, Newcastle, Sheffield. Wembley Stadium withdraws

* August: Millennium Dome's redevelopers already working on site before licence is awarded.

* 30 January 2007: Manchester recommended to host supercasino

* Tessa Jowell says MPs can vote on the panel's recommendations "at the earliest opportunity", probably in March. Losing bidders can challenge the decision in the courts.