Dome runs up £19m in unpaid bills, secret report reveals

The Millennium Dome owes £19m in unpaid bills and has committed itself to contracts with suppliers that run long past the end of the year, according to a secret accountant's report.

The Millennium Dome owes £19m in unpaid bills and has committed itself to contracts with suppliers that run long past the end of the year, according to a secret accountant's report.

The doomed attraction is also facing legal action by some of the creative Britons it is supposed to be promoting, and could face years of costly legal action to untangle the mess.

The damning investigation into the Dome débâcle, carried out by accountants PricewaterhouseCoopers (PwC), has only been seen by a handful of Dome directors and Cabinet ministers. It prompted a £47m bail-out last week, the appointment of company doctor, David James, as the new Dome chairman, and will call into serious question the position of the Dome's finance director, Neil Spence.

So muddled is the situation with contracts that the David James rescue squad are having to contact suppliers to assess the Dome's obligations. The Dome has about 3,000 individual suppliers.

Nomura, the Japanese bank which is supposed to be buying the project for £105m, has been refused sight of the report, prompting threats by Nomura to pull out of the deal this week. However the Independent on Sunday has seen details of PwC's conclusions, and they make damning reading.

The accountants have found that many contracts with suppliers of catering, cleaning and other services have deals stretching well beyond 31 December. This is despite the fact that the Dome was always due to have a life of just a year.

PwC found that, against normal business practice, there was no standard contract with suppliers, leading to confusion as to the terms on which deals had been struck. Mr James is currently working out how much it will cost to untangle this mess, and the estimate runs into millions of pounds.

The New Millennium Experience Company (NMEC), which runs the Dome, still owes £19m to the companies which designed, built and equipped it. The architects of two of the zones are still owed money, as are builders, artists and photographers. One creative agency, which asked not to be named, said it had written to NMEC threatening legal action.

There is no record of what NMEC owns, either in physical or intellectual property. The accountants have said that unless this is made clear, NMEC could face legal actions from suppliers for many years after the Dome is sold.

The NMEC may have to spend in excess of £10m clearing up both the legal and environmental mess left when the attraction is sold. The accountants were unable to obtain an estimate of these costs.

Guy Hands, the banker leading the Nomura team, is understood to be livid about the situation at NMEC. To be able to take over the Dome on 1 January, Nomura needed to have completed the purchase 10 days ago. A senior source described the situation as "like trying to buy a house without a survey".

Nomura has been told it cannot have the PwC report because it must first go to the National Audit Office. The company has spent £10m already on its bid but has told Lord Falconer, the minister who is in charge of the Dome, that it will pull out in the next few days if it cannot obtain the information it needs to complete the deal.

As it is, Nomura now doubts it can obtain the planning permission for the proposed changes to the attraction in time for it to take over in January. Bizarrely, the Dome only has planning permission lasting a year and Greenwich Council cannot extend it without public consultation, which would take up to three months.