New deal for Millennium Dome

A complex leasing arrangement for the beleaguered Millennium Dome has been confirmed today by ministers who are expected to come under a storm of criticism for the decision.

Dome minister Lord Falconer has agreed a deal with a property and sports consortium, Meridian Delta. The group, which is backed by US sports magnate Phil Anschutz, will lease the structure for a 999 year period, and turn it into a 20,000-seat arena for sport and entertainment. Some of the surrounding land is expected to be used for offices and homes - including some low-cost social housing.

It is not clear how much Meridian is to pay for the long lease but it is likely to be just a fraction of the £628million of Lottery cash that the attraction has already swallowed.

It is thought that the final figure will be considerably less than the £125million offer from Legacy, which wanted to turn the site into a high-tech science park, rejected by the Government in February.

Meridian, led by property companies Lend Lease and Quintain Estates, is named as the "preferred bidder" for the site, and will now undergo months of further negotiations.

This process has already been entered into twice before by ministers - and each time agreements have folded before final deals have been signed, piling up problems for the Dome.

Meridian, which is likely to make "phased" payments to the Government, came top of a shortlist of three alternative proposals. The others were a biotechnology centre run by scientific researchers the Wellcome Trust, and a sports academy proposed by shopping centre developers Topps Estates.

The Tories have already hit out at reports of an agreement with Meridian. Shadow culture secretary Tim Yeo claimed the Government had been "humiliated" and added that ministers had been effectively forced to admit the site was "unsaleable".

The Dome has stood empty for a year - at a cost of £20million - after having to be constantly bailed out with Lottery cash during its single year of operation because of much visitor numbers being much lower than expected.

Ministers are understood to have been impressed by the behind-the-scenes presence in the Meridian bid of Mr Anschutz, the secretive billionaire who owns the LA Lakers baseball team in the US.

He is said to be one of the 10 richest men in the US. He has given money to Republican presidential candidate Bob Dole.

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