Lost in France: one damp mouse: Euro Disney is very sick. It looks like time to go home. Frank Barrett reports

ONCE UPON A TIME, in a large field of sugar beet near the city of Paris, a Very Rich Man told everyone that he would build Europe's biggest theme park. Nearly everyone laughed and told him he was mad. 'Lend me lots of money and, honestly, this park will make you all rich,' he said.

'Perhaps he's right,' said some of Paris's important people. 'We do need jobs, after all.'

The Very Rich Man said that if they didn't give him the money he would take his park to Spain or Britain. The people were frightened, so they handed over the money. The park was built and, as the Very Rich Man had promised, visitors came. But not enough visitors for the Very Rich Man to repay the Very Large Debts. He turned again to the local people: 'Help me. Lend me more money and everything will turn out well.'

The local people became very angry because they saw they had been very foolish: 'You are a Very Rich Man. Why should we lend you more money? In fact, come to think of it, as you are Very Rich, how come we lent you so much money in the first place?'

If the American Walt Disney Company is unable to persuade 62 separate banks to shoulder a larger share of Euro Disney's crippling pounds 2.3bn debt within the next four weeks, the theme park will close its doors. Europe's biggest leisure development, covering an area one-fifth the size of Paris, will have established a more unenviable record by becoming the world's most spectacular commercial failure.

After two years of stoutly defending Euro Disney - arguing that the park is the unfortunate victim of the recession - the Walt Disney Company in America has suddenly changed its attitude.

Rather as the US government began to see in the early Seventies that it had no alternative but to extract itself from the unwinnable war in Vietnam with as much dignity as it could manage, the Disney management is now showing clear signs of being equally keen to bring their boys home.

Last year a change in Euro Disney management, a new marketing plan and cuts in entry prices and hotel rates were expected to work wonders. In fact, Euro Disney's losses have continued to mount even more rapidly: in the first quarter of the current financial year, for example, the park was losing around pounds 700,000 a day - a terrifying haemorrhaging of cash that has forced a leading credit agency to downgrade the Walt Disney Company's American double-A rating.

For Michael Eisner, 51, the man who has proved to be Walt's natural heir with the same Midas touch, the Euro Disaster is a particular humiliation. Buoyed by the huge success of Aladdin last year, nobody is calling for his head at the moment, but in the company's recent annual report, in his letter 'To Our Owners and Fellow Disney Employees', Eisner sends clear signals that he wants out from Euro Disney.

'Some would call it dreadful, and in a financial sense I would be forced to agree,' writes Eisner. And while efforts will be made to turn the park's fortunes around, he adds: ' I promise all shareholders of the Walt Disney Company that we will take no action to endanger the health of Disney itself.'

At Euro Disney last week, senior staff that I spoke to clearly felt betrayed by their American masters. They feel they may soon be abandoned and left to continue the hopeless fight alone. Even if the present discussions with the bankers in Paris produce an agreement on new financing arrangements, all parties involved are painfully aware that this might only offer temporary respite.

Pride, conceit, greed and over-ambition lie at the heart of Euro Disney's downfall. The impulses that led to the disastrous plan for the Paris park are to be found in one of Disney's great successes and the frustration it brought. Tokyo Disneyland, which opened in April 1983, had been a wild success, breaking California Disneyland's 28-year-old attendance record for a single day when it was visited by 94,378 people. But this triumph, sensational and durable though it has been, caused more regret than pleasure.

The contract for the Tokyo project was signed in the dog days of 1979, when the Disney company was still languishing under the weak management that prevailed after the death of Walt Disney in 1966. In 1984, Hollywood hotshots Michael Eisner and Frank Wells were recruited, and under their dynamic control the slumbering giant was abruptly revived.

They were appalled at what been signed away in the Tokyo deal. The park carried Disney's name but was owned by a local company. It earned Disney only a modest share of the fast-growing gate receipts, merchandise sales and sponsorship agreements. Eisner and Wells were keen to set about constructing a European park, where the lion's share of the profits would flood into Disney's own coffers.

Though there was talk of Barcelona, Disney executives were convinced that Paris was the only site for the new park. Apart from the fact that the French government was offering astonishingly generous concessions on loans and promising handsome tax breaks, as well as agreeing to fund motorway and high-speed train links, the French capital is easily accessible to the rest of Europe. Paris is within a four-hour drive of 68 million people and a two-hour flight of 300 million. Disney had no doubt that the demand would be momentous.

The Disney management knew that each year more than 2 million Europeans entered the gates of Disney World and Disneyland in the US. How many more millions would make the trip to a Disney park on their own doorstep? The consultants Arthur D Little estimated as many as 17.8 million visitors in the first year alone (only around half that number actually visited Euro Disney in its first 12 months).

They must have salivated as they ran the projected figures through their computer spreadsheets. In the first year alone, it seemed likely that the park would ring up an income of dollars 1.1bn.

Tempted by such a fortune, they built not wisely but too well. This would be no theme park - it would be one of the wonders of the old world. Faced with the task of providing 5,000 hotel rooms, most companies would have been happy to get by with a few bland, low-cost tower blocks. Not Disney: pursuing a Medici-like policy of sponsoring the finest artists, the company commissioned architects of the stature of Michael Graves and Robert Stern to design six distinctive hotels, each reflecting a different American region.

Graves's skyscraper pastiche 575-room Hotel New York, complete with Art Deco-inspired rooms, was built facing Stern's grandiose 1,008-room Newport Bay Club hotel across a large man-made lake. Just walking around all six hotels to inspect the rooms would take the visitor on a two-mile trek. Euro Disney was fashioned in the manner of Kubla Khan's Xanadu (So twice five miles of fertile ground with walls and towers were girdled round).

The fact that building costs for the project spiralled out of control, running 30 per cent over budget, seemed almost irrelevant. But when on opening day, 12 April 1992, fewer than half the expected visitors turned up, it first became horribly clear to the Disney management that the people might never come - and they never did.

Can Euro Disney's problems simply be solved by debt restructuring? There are certainly financial problems: but there is a more fundamental question of whether Europeans really want Euro Disney. The best evidence indicates that we love Disney theme parks - but in the Florida sunshine, not in the grey February mist of Marne la Vallee.

(Photograph omitted)