New Arsenal stadium threat

Arsenal are facing a new battle over the building of a landmark 60,000-seat stadium.

Businesses have lodged a last-ditch legal bid to prevent them being forced to make way for the £357million development. This will not affect the building of the new stadium itself, which is scheduled to open in two years for the 2006/7 Premiership season.

But it means months of uncertainty as the club awaits the go-ahead to build 300 flats, shops and restaurants alongside to help subsidise the project.

A number of businesses and residents have asked the High Court to overturn a ruling by Deputy Prime Minister John Prescott allowing 20,000 square metres of land, to the south of the new stadium, to be bought up.

Mr Prescott ruled this year that the club's proposals should go ahead because they would help regenerate north Islington - one of the capital's most deprived areas. But this over-turned the findings of his own planning inspector, who found no justification for issuing compulsory purchase orders (CPOs) on behalf of the Premiership champions - saying this would be the first time businesses would be forced out for a football stadium.

Arsenal want to build a new ground at Ashburton Grove, Holloway, to boost ticket sales - allowing the club to compete on an even financial footing-with Manchester United. The Old Trafford ground has a 67,000 capacity, while Arsenal's Highbury home takes 38,000 - leaving a substantial deficit in income.

But the planning inspector, Rupert Grantham, said: "My view is that a desire to bolster the club's chances of future success would not be a sound reason for the use of compulsory purchase powers."

Now businesses in Queensland Road - including the Alliance Spring Company, which has been on site since 1911 - have embarked on one last legal challenge. They say the compensation they have been offered is inadequate and will not allow them to relocate in the borough, threatening their existence.

One resident, retired nursery nurse Elizabeth Clare, claims the development breaches her human rights as it will blight her quality of life.

Charlie Hopkins, the complainants' solicitor, said: "At a general level, the High Court does not like what may be perceived as overly-political interference in the planning process."

Before Arsenal announced their plans for Ashburton Grove, the area employed about 1,000 people in 38 businesses. Many have since sold but six are contesting the CPOs.

Anti-stadium campaigner Islington Stadium Communities Alliance said the club wanted to turn business land into higher-value housing to subsidise the stadium. It said a council survey had shown 75 per cent of local people opposed the project, which would affect 75,000 residents.