Tycoon in charge of Dome charged over 'illegal deals'

The redevelopment of the Millennium Dome is on track despite an insider-dealing lawsuit against the billionaire American businessman behind the project, the Government insisted yesterday.

The allegations against Philip Anschutz were described as the "ultimate nightmare" for the Government, which has been desperate to find a use for the Dome since it closed after its ill-fated exhibition in 2000.

But officials claimed the lawsuit would make no difference to the plans to turn the site into an entertainment complex because Mr Anschutz was just one individual in the consortium taking over the Dome.

Mr Anschutz, the founder and former chairman of the telecoms group Qwest Communications, is one of five executives named in a civil lawsuit by the New York attorney general, Eliot Spitzer. The suit accuses them of making £18m through insider dealing with the Wall Street bank Salomon Smith Barney. Mr Anschutz is alleged to have made £3.2m.

The Tories and the Liberal Democrats called on John Prescott, the Deputy Prime Minister, whose department now oversees the Dome, to review the deal that handed the £750m structure at Greenwich to the Meridian consortium for nothing in return for a share of profits when it reopens as a music and sports venue with a 20,000-seat capacity.

The consortium is made up of partners including another of Mr Anschutz's companies, Anschutz Entertainment Group. When the deal was announced, the Dome Minister at the time, Lord Falconer of Thoroton, said the "proven" record of the partners gave reassurance that the plans could be delivered.

Yesterday, the Liberal Democrat culture spokesman, Nick Harvey, said the Government should be "very nervous" about handing the Dome to Mr Anschutz if the allegations were substantiated, and should put the deal on hold until the case was resolved. "It must be the ultimate nightmare for the Government," he said

A spokeswoman for Mr Prescott said the agreement was with the companies that made up the consortium but the allegations were against Mr Anschutz as an individual.

Mr Spitzer accuses the five executives of making gains on new stock offerings (IPOs) allegedly steered to them by Salomon Smith Barney in return for giving their business to the company, a unit of Citigroup.

Mr Anschutz is said to have reaped illegal profits from participating in 57 initial public offerings. Mr Spitzer claims Mr Anschutz also made some $1.4bn (£890m) from the sale of Qwest stock promoted by Salomon. A spokesman for Mr Anschutz denied the charges.