Falconer denies £200m sweetener for Dome sale

The Government has denied claims that it would include a £200m "sweetener" as part of a deal in which the Millennium Dome, plus 150 acres of land, is given away to developers.

Lord Falconer of Thoroton, the minister with responsibility for the Greenwich site, will announce this week that a consortium has agreed to redevelop the attraction as part of a £4bn scheme for a "mini-city" of homes and offices.

But he rejected reports yesterday that negotiations on the deal had included promising a new crossing over or under the Thames, the cost of which would be borne by taxpayers.

The Dome has already taken more than £600m from lottery funding and is still costing £300,000 a month in maintenance costs. Under the proposals to be announced by Lord Falconer, the consortium, Meridian Delta, will be given the site. It will turn the attraction into a 20,000-seat arena and build up to 5,000 homes on the surrounding land. In return, the Government will receive a share of profits from the development.

However, in order for the project to succeed, Meridian is adamant that a new river crossing will have to be built. "We made it clear from when we first sat down with them last autumn," a spokesman said yesterday.

If the crossing were a bridge, the cost would be likely to reach £200m. If a tunnel were chosen, the bill would likely top £250m.

Asked on GMTV's Sunday Programme about newspaper reports of such a promise, Lord Falconer said: "They are wrong. There has been considerable debate about the third London crossing, and as the Greenwich peninsula developed, the transport infrastructure was one of the main issues. But there is no question of any commitment or sweetener during the course of these [negotiations]."

London Mayor Ken Livingstone presented a transport strategy document last year in which he said new crossings in the east of London at Woolwich, Gallions Reach and Silvertown would be vital for regeneration of the area.

But a spokeswoman for Mr Livingstone said yesterday: "Their construction is dependent on adequate finance, which London does not have. It would require both the allocation of funds by the Government in its transport grant to London and large private sector participation."

The Department of Transport, Local Government and the Regions said it expected an agreement to be reached with the developer by the end of the month but a spokeswoman said a decision on a new crossing would lie with Mr Livingstone. That leaves the way open for the Government to fund the mayor's plans without the appearance of giving a "sweetener" to the developer.

Meridian Delta's backers were reported to include the Australian property developer Lend Lease and British developer Quintain. The new arena is expected to open for Christmas 2005, but the housing may not be completed until 2018.