Fight to save the Eye

The battle over the London Eye escalated today with warnings that our Olympic bid is under threat.

The claim came in a ferocious attack on the Government's handling of the crisis surrounding the future of the landmark.

The Conservatives say it would be "unacceptable" for it to close down or be moved from its site on the Thames. The Eye's future is under threat from a massive rent increase proposed by the South Bank Centre, the government-appointed body which owns the site.

It wants to increase the rent from £65,000 a year to £2.5 million, which the Eye's owners claim is uneconomic.

Shadow culture spokesman Theresa May said the blame would lie with ministers if the Eye was forced off its South Bank site. She warned it would "send a signal" to Olympics chiefs because the Eye is used prominently in London's campaign brochures for its 2012 bid.

The rent row is set to climax in July, within days of a final decision on which city gets the Games.

"It is absolutely unacceptable that its future should be put at risk in this way," said Ms May. "The Eye is a prominent feature in all of the London Olympic bid promotional activities, yet at the same time its future is in jeopardy.

"What sort of message does this send to the Olympic committee?"

"It is now essential that everything is done to end this unnecessary stand-off and prevent the Eye's closure."

She called for a full statement by Culture Secretary Tessa Jowell and said ministers could not wash their hands of the affair. "The issuing of an eviction notice by the South Bank Centre is a step too far." Ms May said ministers could not escape responsibility for the future of the giant wheel because it is ultimately in control of the decision.

The South Bank Centre's board is chaired by Labour peer Lord Hollick, who was appointed by Ms Jowell three years ago.

At the time Ms Jowell hailed the London Eye along with the National Theatre and the Tate Modern as part of a "cultural hub which will attract tourists from all over the world". Ms May added: "That one of the Government's own peers should be behind the move is doubly disturbing.

"Not only should the minister call Lord Hollick to account over this matter, the minister must urgently make a statement to clarify exactly what she is doing to ensure the future of the landmark."

Ms Jowell today refused to intervene. She said that it would be wrong for her to interfere.

She said the rent dispute was "brinkmanship - an essential part of the negotiation". She said it was not a matter for the Government. The campaign to save the Eye is backed by a host of London celebrities.

The Eye cost £85 million to build in time for the Millennium celebrations, with financing from British Airways. It was an overnight success and now generates £40 million a year.

Despite its high turnover, its owners claim the rent rise is not affordable because much of its revenue is taken up servicing the original building loans.

Tussaud's, who were appointed managers in perpetuity by BA, take four per cent of all tickets sales as a "management fee". With so many calls on its profits, the Eye has actually got into bigger debt - £150 million and growing at a rate of £25 million a year.