Blair stops the dithering over the dome takes

The latest reprieve of the Millennium Exhibition is a triumph of Tony Blair's heart over his brain and it is such a high-risk gamble that he may come to regret allowing the wrong organ to determine government policy.

Until yesterday, everything pointed to a sensible retreat by the new Labour government. The Greenwich project, in south-east London, was in a mess with very little worked out in detail except the dome, which had mysteriously changed shape when it was relaunched by Lord Rogers and his team last week. Labour had expressed concern about the lack of substance in the ideas for the contents of the dome and wanted a more educational and spiritual content.

Indeed, support for the project had begun to wither away and very few companies had come forward as definite funders. The Sun newspaper splashed with "Dump the Dome". Imagination, the designers, had been "stood down". And worst of all, nothing much had happened since the last crisis in January which had resulted in a fudge between Conservative and Labour. There was an agreement that the incoming government would be able to review the project, but in an effort not to deter private-sector investors, that was only supposed to cover the details, not whether the project should carry on or not.

That proved to be misleading. The review carried out in the past month by four consultants on aspects of the scheme such as transport, construction and visitor numbers was fundamental and could have led to cancellation. Moreover, earlier this week it was revealed that English Partnerships, the quango which owns the Greenwich site, was keen to have it cleared after the exhibition, which meant the dome would be temporary.

Given this plethora of problems and with time running short - the scheme is supposed to be finished by September 1999 - Labour could have pulled out gracefully, blaming it all on their predecessors. It would have wasted around pounds 25m but it would have left a clean site for regeneration.

There would have been justification. The Tories had dithered since the project was conceived. First, when Stephen Dorrell was Secretary of State for National Heritage in May 1995, he said it was to be entirely private, costing around pounds 100m and expected to attract 50 million visitors - rather different from the present 10-12 million.

Then the project was put out to tender and allocated to Greenwich, rather than to Birmingham. Butthe rather unexciting Birmingham scheme had much of the sponsorship money lined up whereas Greenwich had no such support. So, in late 1996, the Tory government announced that it was going back on its ideological instincts and renationalising the project, creating Millennium Central to run it. Even then, the difficulties did not end. In December, the chief executive of Millennium Central, Barry Hartop, left hastily and was replaced by Jenny Page, the then chief executive of the Millennium Commission.

When Labour inherited this muddle, ministers were aghast. While Tony Blair's enthusiasm was echoed by Nick Raynsford, the MP for Greenwich and minister for London, other senior ministers, seeing the business plan for the first time, wanted the project to be dropped. Frank Dobson, Secretary of State for Health, reckoned it was "the biggest kite in history" and another senior minister said: "I have never seen such a mess in my political life. This wouldn't have got past a local parish council finance committee."

Labour backbenchers also began to express opposition openly. A motion saying the scheme should be scrapped was supported by 26 MPs and a further 19 wanted it moved back to the cheaper Birmingham site.

Despite this opposition, Mr Blair ploughed on. He wanted something that would excite his 13-year-old, Euan, and would leave a lasting legacy. Strongly influenced by his friend, Lord Rogers, the architect, and Bob Ayling, the British Airways chief executive who now moves in Labour circles and who has been rounding up business support, he desperately wanted to retain the project.

Greenwich is, therefore, to be the Prime Minister's pet project. And although its future is still is subject to the five criteria set out in yesterday's announcement, it is almost inconceivable that it will be scrapped.

The figures look frightening. The total budget is pounds 850m, of which pounds 450m will come from the lottery. About 30,000 visitors a day, paying pounds 20 each, will be needed throughout the 15 months of the exhibition to make it viable. One of the new criteria is that no extra public money will be needed.

But business is not going to pay the extra and therefore the Government would have to cough up. It is a high-risk strategy that could give Labour a big boost in mid-term or could be a terrible fiasco.