FA warned over Wembley package

The Government is preparing to withdraw support for the troubled Wembley Stadium project if plans to fund the scheme through a German bank collapse, Culture Secretary Tessa Jowell has told the Football Association.

After another week of chaos in the management of the £715 million scheme, Ms Jowell was today preparing to tell MPs her patience is running out. Although the FA is increasingly confident it can tie up a £485 million loan from West Deutsche Landesbank in "weeks rather than months", doubts persist over the plans.

As part of the scheme's funding package the Government has pledged £20 million towards transport and infrastructure improvements around the rundown Wembley site.

In a thinly-disguised threat to the FA, Ms Jowell told the Commons: "The money sought from the Government is still on the table. It forms part of the financial package and will remain there while the present negotiations with the bank continue to progress to conclusion."

She added that while there was a chance of the deal going through the Government would continue to offer its support. She made her announcement after facing a Select Committee of MPs looking into the Wembley shambles. Amid accusations that the Government failed to protect a £120 million Lottery grant, used by the FA to buy the Wembley Stadium site, she was expected to announce Treasury watchdog the Office of Government Commerce will in future review all major Lottery grants.

The move will be seen by some as a criticism of the role played in the fiasco by sports Lottery distributor Sport England.

Earlier this week the committee, chaired by Gerald Kaufman, was told the FA, which owns Wembley National Stadium Ltd, is considering reopening the old stadium if the deal with West LB falls through. The FA has a 20-year staging agreement with WNSL to play its England games and the FA Cup Final there, even though demolition work on the Twin Towers has not started.

That has enraged officials from an alternative scheme in Birmingham who say they were promised they would get the national football stadium if plans for Wembley fell apart. Birmingham City Council said yesterday it would sue the FA for the £500,000 spent by local taxpayers on the failed bid.

It led to an immediate climbdown from the FA which said the cost of going back to the old Wembley, estimated at £40 million for just five years of use, made the option increasingly unlikely.