Public bill for millennium dome notches up extra pounds 27m

The Government has slipped through the payment of an extra pounds 27m for the Millennium Experience at Greenwich, despite a promise there would be no extra call on the public purse.

Peter Mandelson, the minister responsible for the project, has warned Jenny Page, chief executive of Millennium Central, that he wants "no more surprises" after discovering that Mark McCormack, of the sports sponsorship company IMG Associates, could have earned 10 to 15 per cent on his contract for drumming up business for the "dome" project in south-east London. Mr Mandelson acted swiftly to ensure that Mr McCormack's earnings were reduced to 6 per cent of the estimated pounds 150m to be raised from private investment.

Mr Mandelson has told managers of the Millennium Experience that he wants to be told the full history of the contracts and fees agreed for the former exhibition scheme.

Now the announcement of the payment of more money which was contained in a written answer from the Deputy Prime Minister John Prescott to backbencher John Mcdonnell, last week could raise fresh questions.

Mr Prescott said in the Commons answer that the sum has been found out of reserves to pay the quango, English Partnerships, for the "clearing and preparation of the Greenwich Peninsula site for the Millennium Exhibition".

The payment means that the total cost to the public purse of site preparation and purchase is pounds 52m. The Government has already paid pounds 20m to buy the site from its owners, British Gas, and English Partnerships has spent pounds 5m on site clearance.

The revelation of the extra cash will be an embarrassment for the Government which has already been widely criticised for proceeding with the scheme. Ministers have consistently argued that there will be no call on the public purse because the subsidy of pounds 400m is coming from lottery receipts.

However, the pounds 52m cost of site clearance is all coming from government funds and there is no guarantee that the clearance will remain within its budget as it is a very complicated and unpredictable task.

The budget for the Millennium Experience has been finalised at pounds 750- pounds 790m - pounds 590m plus between pounds 160m and pounds 200m contingency, according to the New Millennium Experience Company which is running the project. Therefore, with the land costs, the budget could reach pounds 840m.

On the income side, the organisers are hoping for pounds 195m from sponsorship and commercial deals, pounds 135m from ticket sales and pounds 60m from product sales. The rest will come from lottery funds.

Last night, a spokesman for the combined Department of Transport and Environment said: "The payment was agreed in February under a deal between the then-government and the Labour opposition. It is being paid now because that is when summer supplementary estimates go through."