Labour deals blow to millennium festival

Labour confirmed yesterday that it would not "sign a blank cheque" for the Millennium Exhibition, despite warnings that the project was in danger of folding.

A huge dome to be built in Greenwich, south-east London, was expected to be the centrepiece of the millennium celebrations. But Labour's heritage spokesman, Jack Cunningham, insisted yesterday that the Government had failed to come up with a realistic budget and he would not give an open- ended commitment to dip into lottery funds. Labour's backing for the project is seen as crucial because if the party wins the election the millennium celebrations will take place under a Blair government.

Government sources have warned that time is running out and unless the funding dispute is resolved within the next few weeks the exhibition will have to be abandoned or drastically scaled down. But the Deputy Prime Minister, Michael Heseltine, said that the Government was on course to raise pounds 150m in sponsorship from the private sector and insisted extra lottery money would only be needed to deal with contingencies.

The exhibition was dealt a further setback last week when Barry Hartop, chief executive of the organisers Millennium Central, left at the end of his 90-day contract. The Government is now proposing to take over the running of the project and is considering handing it to a specially created public body, rather than leaving it in the private sector.

Roger Freeman, Chancellor of the Duchy of Lancaster, the Government troubleshooter who was given the job of sorting out the beef crisis earlier this year, and Jennifer Page, chief executive of the Millennium Commission, look set to take over Mr Hartop's role.

But Mr Hartop warned yesterday that it was essential for the funding dispute to be resolved soon. "The programme is extremely tight. It is going to be necessary for there to be clarity in the first two to three weeks of January," he told BBC Radio 4's The World This Weekend.

On the same programme Dr Cunningham denied that he had been "playing party politics" over the exhibition. "We've been presented very recently with a budget, when we include all the figures, of something around about pounds 1bn for a project which, on the basis of what we've been told, clearly has no possibility of financing itself," he said.

"We were first asked to give an open-ended commitment in time and cash through the millennium lottery income to this project and we've said no. That would be imprudent. I'm not going to sign a blank cheque for any scheme whatever the cost and that remains our position. What we need to see for this project is a budget which is realistic."

Mr Heseltine said that under the proposals, the Millennium Commission, funded by the National Lottery, would put pounds 200m into the project and another pounds 150m would be raised from the private sector. But he said the Government was proposing to extend funding for the commission beyond 2000 to deal with any cost over-runs.

"In Government we made it clear we weren't prepared to underwrite the situation, but what we were prepared to do was to extend the funding of the Millennium Commission beyond the date which so far is its final date. That would be lottery money."