Elstree showdown, take one OR ... Brent Walker in Elstree snub... OR

Elstree Studios: will Brent Walker keep the agreement to reopen them for film production? Photograph by DILLON BRYDEN

BRENT WALKER, the debt-laden betting to leisure group, has ignored an ultimatum to reopen the doors of Elstree Studios to film production.

The ultimatum, which expired on Friday at 5pm, gave the company 14 days to reply to Hertsmere Borough Council, in Hertfordshire, or face a compulsory purchase order. Hertsmere will now apply for the order to buy the studios, where Star Wars and Indiana Jones were shot.

Tim Quinlan, Brent Walker director for leisure and property interests, said: "It is not a threat I take too seriously. I can't see a council being in the film production business. Furthermore, Hertsmere has to prove the studios are necessary for the community's well-being."

Hertsmere's finance director, Jim Hill, said: "It is no surprise to us, and is what we have come to expect from Brent Walker." A compulsory purchase order is granted by the Secretary of State for the Environment and any dispute is heard by the Land Tribunal. Mr Quinlan estimates the process would take two years.

The studios shut in 1990 when Brent Walker began to develop adjoining land for a Tesco store: it was impossible to make films with construction work nearby. The company drew up an agreement with the council obliging it to keep the site open as a film studio for 25 years. However, the studios have not reopened and Brent Walker also faces a High Court action from Hertsmere, accusing it of breach of contract.

Even at today's land prices, Brent Walker would realise far more if the site were redeveloped as a shopping centre. This would be subject to planning permission, which Hertsmere would contest vigorously.

The council believes film studios offer better economic advantages to the town than another shopping centre. "A shopping centre would bring some employment, but the film studios bring all sorts of other benefits to the town in addition," said Mr Hill. He added that the area was already well served by the Brent Cross and Watford shopping centres.

It is understood Brent Walker has received offers of up to pounds 3m for the studios, far less than the development value.

Twentieth Century Fox put in a bid that was rejected. Sega, the Japanese computer game manufacturer, drew up a plan for an animation and virtual reality theme park. The studios, along with Brighton Marina, are on Brent Walker's books at pounds 75m.

Mr Hill warned: "We are well covered, with no financial difficulties in fighting a lengthy legal process."