Dome boss inquiry 'nightmare'

The government says the Dome project goes on

Plans for redeveloping the Millennium Dome could turn into the government's ''ultimate nightmare'' as legal proceedings are brought against the man behind the scheme, the Liberal Democrats have warned.

US billionaire Philip Anschutz, who wants to turn the Dome into an entertainment complex, has been accused of illegally making money on the New York stock market.

He is one of five senior businessmen to be named in legal proceedings begun by New York's attorney-general, Eliot Spitzer.

The lawsuit says Mr Anschutz was ''bought off'' with shares

Liberal Democrat culture spokesman Nick Harvey said that, in light of the developments, the government should review the arrangements in place for the Dome handover.

"It must be the ultimate nightmare for the government that when they finally think they've got [the Dome] off their hands... it turns out the man they're handing it over to for the next 20 years has some question marks over him," Mr Harvey told BBC Radio 4's Today programme.

'No impact'

"The government will wonder what sort of a deal they've got themselves into given that they have no guaranteed income from this deal at all and are just relying on Anschutz to give them a split of his takings."

The lawsuit is unfounded and absolutely without merit

Anschutz Corp

He said it would be premature of the government to bail out immediately but suggested it should review the arrangements in place.

But a spokesman for the Deputy Prime Minister's Office, which oversees the Dome project, said the legal proceedings against Mr Anschutz would have no impact on the government's deal.

The deal was with Meridian Delta in consortium with Anschutz Entertainment Group, whereas the proceedings were against an individual, the spokesman said.

The company's former chief executive Joseph Nacchio is also named in the lawsuit, as is the former head of WorldCom, Bernie Ebbers.

Troubled history

The lawsuit alleges that Mr Anschutz and the other executives were "bought off" with personal allocations of newly floated shares in exchange for steering company business to Salomon Smith Barney.

The Anschutz Corp released a statement calling the lawsuit "unfounded and absolutely without merit".

It said that Mr Anschutz did not personally receive any share allocations.

The other executives names in the lawsuit are Metromedia Fiber Networks chairman Stephen Garofalo and former McLeod USA chief executive Clark McLeod.

Dome plans

The deal to redevelop the Dome as a 20,000-seat sports and entertainment complex was unveiled in December last year.

Meridian will have a 999-year lease and plans to open the site in 2004.

The deal drew criticism from the Conservatives, who said it was carried out in secret and could lead to more public money being wasted on the site.

Under the deal, the government will only get a share of the profits, which it claims could add up to £550m over the next 20 years.

Ministers say the scheme will create 7,000 new homes and 20,000 jobs.