Four year wait for Dome cash

The Millennium Dome is to be converted into a "world-class" sports and live music arena, but the Government will not receive a penny upfront.

Ministers have signed a provisional deal to lease the 190-acre Greenwich site for nothing to international developers Meridian Delta Ltd.

The Government insists a profitsharing deal will allow the Treasury to recoup an estimated £500million over the first 25 years, but none of this will be seen before the end of 2004 when a 20,000-seater arena will open.

Critics will point out that, after 12 months of talks, the Government has chosen a deal that will not recover the £628million of Lottery money poured into the project, let alone the millions spent on keeping it empty since the start of the year.

Former Dome chief executive Pierre-Yves Gerbeau said ministers appeared to have performed a U-turn since rejecting his £150million bid earlier this year to keep the Dome open as an entertainment and sports complex.

"It is exactly the same scheme that we proposed nine months ago," he said. "When we proposed it, we were told we were a bunch of crazy people and out of control and that our vision would never work."

Lord Falconer, the minister responsible for the Dome, said the deal represented a "world-class future for a world-class site", adding that the MDL deal is "more favourable to the public purse" than two earlier bids by Nomura and Legacy, which offered money up front in the region of £125 million.

The MDL proposals, subject to a provisional terms-of-sale agreement, are being presented as offering the Treasury a share of profits and a say in the site's development while the private sector takes on the costs and risks.

The arrangement will see around £4billion invested in the land around the Dome. Parkland, shops, offices and at least 5,000 new homes will be built, and about 20,000 jobs created.

The Dome itself is envisaged by MDL as "Europe's premier entertainment venue", the equivalent of New York's Madison Square Garden. Stars such as Madonna and Barbra Streisand are imagined in a revamped arena that will play host to pop, rock and classical concerts as well as sporting events.

MDL plans to spend £200million to create a venue fit to match its Los Angeles Staples Centre, the location for this year's Grammy music awards and the Democratic Party Convention.

Impresario Harvey Goldsmith, who has been working as a consultant to MDL bid, said it had the "right people and the right experience behind it" to supply London with the venue it deserves. "London does not have a first-class arena and has needed one for a long time," he said.

Subject to planning approval by Greenwich council, the area around the Dome will be developed into "Dome Waterfront" with bars, parks and community facilities. The council will also rule on the proportion of affordable homes to be included on the site.

Lord Falconer said the arrangement, while "not a done deal", was on course to go through by May if negotiations are successful. Both parties said they would not have reached this stage if they did not believe a deal could be delivered. The companies making up the MDL consortium were described by Lord Falconer as having " hugely impressive track records".

Talk about the Dome