Zoo's future 'secure' despite rejecting pounds 35m deal: Both sides say decision was 'amicable' after six months of negotiations to build walk-through aquarium and cinema

LONDON ZOO insisted that its financial future was secure yesterday, despite its decision to reject a pounds 35m joint venture with a consortium of

investors.

The zoo denied reports that its rejection of the plans would plunge it into a new crisis and said projections for 1992-93 suggested it would break even for the first time in 15 years.

City investors, known collectively as New Zoo Developments (NZD) and led by the entertainment entrepreneur, David Laing, a member of the building family, intended to construct a walk-through aquarium and a wildlife cinema at the 36-acre site in Regent's Park, central London. They had been negotiating with the Zoological Society of London for more than six months but talks broke down over Easter weekend. Both sides said the decision was amicable, but NZD immediately said that it would make an announcement about 'exciting new plans' at another site in London within seven to ten days, fuelling speculation that it could set up in direct competition with the zoo.

Sir John Chapple, chairman of the Zoological Society, said the zoo was still open to the idea of outside investment or partnership, but he added: 'Despite constructive talks . . . we have reluctantly come to the conclusion that we will not be able to proceed with the NZD proposals.'

He praised the work put into the talks by Mr Laing, but analyses by the Council of the Zoological Society indicated that the plans would not provide 'sufficient financial benefit for London Zoo'.

Privately, it is understood some members of the council and senior staff members were concerned that Mr Laing's aquarium would not be fully integrated into the zoo. 'It was to have had its own separate admission charge and would have been built ahead of the improvements planned for the rest of the zoo,' one said. 'It would have been a case of paying admission X for one spangly new bit of the zoo and admission Y for another. There was also concern because NZD said they would move in with their own public relations, marketing and promotions people.'

Ronel Lehmann, spokesman for NZD, confirmed there was no 'malice' on either side but conceded that the Zoological Society had been concerned about sovereignty. 'We will be announcing our new plans in seven to ten days because we want to put this episode behind us,' he said.

One official close to the talks said the potential investors were surprised their offer had been rejected. 'These were blue-chip investors - David Laing, Samuel Montagu (the merchant bankers), and Daiwa (the investment bankers),' he said. 'The City is a small place. You turn people like that down, and other people decide not to get involved with you.'