Portugal stung by Uefa threat to remove Euro 2004

The Portuguese president Jorge Sampaio, dismayed by recent feuding over the 2004 European Championship, has summoned football officials and political leaders for a day of talks to try to defuse the crisis over the biggest international sports event ever held in Portugal.

Wrangling between clubs and politicians over public funding and planning permission for new stadiums has brought a warning from Uefa, European football's ruling body, that it could take the event away from Portugal.

Sampaio, who has no executive powers but can mediate on damaging national disputes, spent Wednesday meeting with 18 officials from the government, local councils and football clubs in a series of meetings throughout the day.

The football club presidents said their meeting with Sampaio went well. "I have more and more respect for the president's courage, intelligence and common sense," Porto's Jose Pinto da Costa said.

Sampaio has urged those involved to avoid fuelling the controversy. The head of state was widely expected to press the officials into reaching compromises. He has said the squabbles are giving Portugal a bad name.

As well as the potential embarrassment of having the competition taken away, Portugal would also lose the economic benefit of welcoming thousands of foreign visitors during the four-week tournament.

The authorities estimate their total investment in Euro 2004 at £3bn, including new stadiums, roads, hotels, hospitals, and airport improvements. However, cost over-runs have almost doubled the £100m in public funding earmarked for new stadiums.

Porto last weekend stopped building work on their new stadium because of a dispute with the city council over earlier promises of public cash and planning permission for developments around the stadium site. The club went so far as to threaten to pull out of the list of venues for the Championship.

Projects for new stadiums in three other cities, including Benfica's new Stadium of Light, have also been unsettled by rows between the clubs and new city mayors who took over after December's local elections.

The incoming mayors were shocked when they discovered the full extent of the financial burden for Euro 2004 that had been placed on their shoulders. Indeed allegedly illegal benefits have been granted to the clubs involved while most of the construction schemes have been hit by escalating budgets. Portugal is building seven new stadiums and renovating three others.