New life for Millennium Dome

The Dome is costing £1.8m a month to keep empty

The long-vacant Millennium Dome is to be redeveloped as a 20,000 seat sports and entertainment complex.

Meridian Delta Ltd has been appointed "exclusive partners" with government agency English Partnerships to regenerate the Greenwich peninsula.

It will take ownership of the Millennium Dome on a 999-year lease and plans to open it as a venue in 2004.

But the deal has drawn criticism from the Conservatives, who say it was carried out in secret and could lead to more public money being wasted on the site.

"Once legally concluded, the deal will provide a 20,000 seat arena inside the Dome, surrounded by an urban entertainment complex," Stephen Byers, the Secretary of State for Transport, Local Government and the Regions, told the Commons.

"The total investment in and around the Dome will be £200m."

A 20-year joint venture between English Partnerships and Meridian will also provide £4bn of investment, at least 5,000 new homes and around 20,000 new jobs on the 189 acre site around the Dome.

'Better value'

It is not clear whether Meridian will actually have to pay to take over the Dome, which cost more than £850m to build and run.

But Mr Byers said the deal was "likely to generate better value" than either of the previous, abortive bids by Nomura and Legacy.

This whole negotiation has been carried out in secret, nobody knows what is going on

Tim Yeo

He said the contract with Meridian is intended to guarantee a minimum price for the land that English Partnerships puts into the joint venture and a substantial share of its profits.

Mr Byers said the precise amount of money depended on the final details and the extent of development, but he added "it will amount to several hundred million pounds".

He said: "The deal also provides for MDL to take on all the risks associated with operating and maintaining the Dome.

"The public sector's only remaining interest will be to receive a share of profits once they exceed a threshold, still to be determined."

Dome minister Lord Falconer said: "This will help to deliver a long term, sustainable future not only for the Millennium Dome, but also for the peninsula as a whole."

'Suspicion'

The new-look Dome planned by Meridian

But Conservative spokesman Tim Yeo criticised the government for secrecy in reaching the deal and suggested more public money could be wasted on the Dome.

He told the BBC: "This whole negotiation has been carried out in secret, nobody knows what is going on.

"The suspicion is that the government has not been able to sell the Dome, that no money will be received and that actually, what they're entering into, is some long term partnership which may involve more public money being spent."

Tory MP Steven Norris was sceptical about the plans.

He said they were "worthy" but they would have to wait until May to see if the plans were going to go ahead.

"Don't hold your breath, we've been here before," he said.

Oil billionaire

Meridian Delta is backed by American oil magnate Phillip Anschutz, the billionaire behind the Los Angeles Lakers basketball team.

It includes Lend Lease, the Australian firm behind the Bluewater shopping centre in Kent, and Quintain Estates, which owns 14 acres of land on the site.

Mr Anschutz, 62, is best known for the Lakers' home ground at the £583m Staples Center in Los Angeles, which was voted the best arena in the US last year

The consortium was competing with two other shortlisted proposals.

Scientific research charity Wellcome Trust has put forward a plan to turn the Dome into a biotechnology centre, while shopping centre developer Tops Estates has proposed a sports academy.

Theme park

Surrounding land will be developed for housing

The Dome has cost tax-payers £1.8m a month to keep empty since it closed, and deals with two of the government's "preferred bidders" have already collapsed.

In November, Britain's richest landowner, the Duke of Westminster, withdrew his bid to buy the Dome because of "the changing commercial and economic environment".

He had entered the competition for the Dome after Legacy plc, which planned to open a technology park, lost its preferred bidder status in February.

The previous preferred bidder, Japanese bank Nomura, pulled out in September 2000 after claiming it did not know the scale of the financial problems they would inherit with the Dome.

It had been prepared to pay £105m for the building - a fraction of its cost.