Manchester Games saved from collapse by £105m government lifeline

The troubled 2002 Manchester Commonwealth Games were rescued yesterday with an emergency £105m handout from the Government, National Lottery and city council.

But ministers' doubts are hanging over plans to stage the World Athletics Championships at Picketts Lock, north London, in 2005.

The life-line for the Manchester games followed warnings that the project faced collapse because of the organisers' failure to win sufficient commercial sponsorship.

Yesterday's move underlines the Government's determination to avoid a repeat of the public relations disasters of the Millennium Dome and the redevelopment of Wembley Stadium. Ministers were also desperate to avoid embarrassing international publicity in the Queen's Golden Jubilee year.

Tessa Jowell, the Secretary of State for Culture, Media and Sport, said: "The Games are an international event which will leave Britain a lasting sporting, social and economic legacy.

"It's only right the Government invests to make it a success. All the obstacles have now been removed for Manchester to deliver a successful Games."

The cash injection will bring the total cost of the project to £335m. Initially, £80m will be available, consisting of £25m from the Treasury, £20m from Sport England, which hands out lottery money, and £35m from Manchester City Council. Its leader, Richard Leese, pledged not to raise the extra money from tax payers, but by drawing on reserves and the sale of property that has risen in value because of the Games.

A further £25m of government, lottery and council money has been set aside as a contingency fund. Payouts would be tightly monitored, Ms Jowell insisted.

Ministers hope the package will be enough to give business and industry the confidence to invest, with organisers hoping to attract £30m in sponsorship.

However, Sport England also announced it could not yet authorise the allocation of lottery money for plans to develop a world-class athletics stadium at Picketts Lock.

Its chairman, Trevor Brooking, said concerns remained over the project's capital funding, long-term viability and planning. He said an urgent review was being set up to look at all aspects of the scheme and would report next month.

Ms Jowell admitted the move could result in the venue for the 2005 world athletics championship being switched elsewhere.

She said: "This isn't no to Picketts Lock, it's not yes to another venue, it's not maybe to the games.

"It's yes to the games and then it's an assessment of the feasibility of Picketts Lock, recognising the very high local commitment and amount of preparatory work that's taken place."