Buyers to put money up front to keep Dome afloat

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The Independent Online

Tony Blair will order a £30m bail-out for the Millennium Dome tomorrow by approving a cash-in-advance bid by Dome Europe to take over the site and develop it as an entertainment park, with the Yellow Submarine among its attractions.

Tony Blair will order a £30m bail-out for the Millennium Dome tomorrow by approving a cash-in-advance bid by Dome Europe to take over the site and develop it as an entertainment park, with the Yellow Submarine among its attractions.

Ministers have been warned that the Dome operator, the New Millennium Experience Company, could run out of cash within weeks, in spite of assurances that a £29m injection of funds from the lottery in May would be enough to keep it open until the end of the year.

Financial reports seen by the Independent on Sunday show that it could cost the taxpayer £200m to allow NMEC to go insolvent, increasing the pressure on the Prime Minister to keep the Dome open.

Part of the down payment of £75m - offered by the Dome Europe consortium, which is backed by Nomura, a Japanese bank - will be used to keep the Dome afloat until the end of the year, thus avoiding a humiliating embarrassment for Labour.

The deal has been stalled for a week by haggling between the Government and NMEC over the "carve up" of the proceeds from the sale. English Partnerships, which owns the land, is also seeking a cut.

NMEC has been told that no more money will be available from the sale. The dire state of NMEC's finances caused dismay last week at a meeting of the Millennium Commission.

Pierre-Yves Gerbeau, the chief executive brought in from France to rescue the Dome, repeated assurances yesterday that NMEC would not need any more lottery funds, but members of the commission do not believe NMEC's figures for future demand. "Our estimates have always been different, and they have been right," said a commission source.

The commission's financial monitoring officers were placed inside NMEC under the tough agreement hammered out when the company obtained its last injection of lottery cash. The officers have warned the commission that NMEC would be millions of pounds short well before the end of the year.

The commissioners, who include Chris Smith, the Secretary of State for Culture, and Michael Heseltine, the former Tory minister who launched the Dome idea, have made it clear to ministers that they want to wash their hands of the project next week, when a new owner is adopted. "We have come to the point where the lottery should no longer be involved," said the source.

Ministers are still insisting that the show has been a hit. "It is still the biggest attraction in Europe and it won't close before the end of the year," said a government source.

Members of the Commission privately discussed allowing NMEC to raise a loan from the asset value of its unique building to avoid the Dome closing down, but that has been dismissed by ministers involved in the crisis talks. The commission is demanding the repayment of £13m to pour back into the lottery funds.

NMEC denied reports last night that it had called in lawyers from Simmons and Simmons, a City firm, to advise on insolvency. It insisted the firm had been hired three months ago to provide "corporate governance advice" before applying for a grant from the commission in May.

The Commons Select Committee on Culture, chaired by Labour MP Gerald Kaufman, is expected to agree a toughly worded report tomorrow criticising NMEC's financial control of the Dome. There will be an outcry if there is any attempt at a "whitewash" by the Labour majority on the committee.

Doubts remain over NMEC's business plan, which assumes that visitor numbers will go up in December. Commission members fear the numbers will actually fall if the public believe the show will improve when the new company takes over.

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