Raised eyebrows as Portillo faces pounds 70m bill for lavish HQ alterat ions

Michael Portillo, the Defence Secretary, has been hit by an embarrassing pounds 70m demand for compensation from contractors working on the new pounds 254m office complex for the MoD's equipment procurement executive at Abbey Wood, near Bristol. The building, the largest office block in Western Europe, has already raised eyebrows for the luxury of its facilities. Now 12 companies, led by John Mowlem, say they are owed the money because ministry officials kept altering the design brief.

Abbey Wood, which will be opened by the Queen on Friday, is also attracting criticism from servicemen moving there. Unlike civil servants relocating to Bristol, they did not receive pounds 20,000 allowances to cover removal expenses.

Known locally as The Pentagon and by its planners as Sim - as in SimCity, the computer game - the vast complex, will house 4,400 members of the procurement executive by the end of the year. It covers 98 acres, and has 230 bathrooms, 26 lifts, a railway station, a 100-pupil nursery, and an Italian suspension bridge. When the mandarins are not assessing defence equipment, they can unwind in the cinema or sports centre. Civil service unions have attacked the lavishness of the design, completed, they say, at the expense of redundancies.

Mowlem is understood to be arguing that while it was charged with overseeing the design and building work, it was not responsible for changes along the way. Some variations had been made by the contractors themselves.

A senior executive at one of the firms involved said there had been hundreds of alterations, and Andrew Gay, head of Drake and Scull, the mechanical engineer, said he "hoped for a negotiated outcome".

The MoD justifies the expense, saying that having the executive under one roof should eventually save pounds 100m a year.

A spokeswoman for the MoD at Abbey Wood, said: "Mowlem was responsible for the detailed design of the project. The MoD operated a tight change control procedure and that has been followed rigorously." She added that while no legal proceedings were yet under way, the MoD was in discussion with Mowlem.