Fifa fury as insurers threaten World Cup

Sepp Blatter, the president of Fifa, last night insisted that football's 2002 World Cup finals in South Korea and Japan would "definitely go ahead" despite the decision by the tournament's insurers, AXA, to withdraw its cover in the aftermath of the terrorist attacks on the United States and the subsequent bombing raids on Afghanistan.

In a development which could have serious implications for major sporting events around the world, including next year's Commonwealth Games in Manchester, the French-based company AXA said it was giving a month's notice of its decision to pull out of its agreement to provide insurance cover for next year's finals.

Blatter, who was clearly infuriated by the announcement, insisted world football's ruling body would be examining the legal implications of AXA's actions. "I have always said that a World Cup in the Far East would be extremely expensive, now it will be even more so," Blatter said in Prague, where he was attending a conference of the game's European ruling body, Uefa.

"We have been given one month to renegotiate the deal that currently stands at 1.4 billion Swiss francs (£617m).''

Blatter said that AXA – which sponsors the FA Cup – had insured the World Cup for various risks, including "terrorism", but told Fifa that it was no longer prepared to carry the risk following last month's terrorist atrocities in the US.

"I would have expected a company such as AXA to have given us some warning about this but there was absolutely none," Blatter said. "It really boils down to a question of money and they clearly want a bigger premium.

"The deal will have to be renegotiated because the World Cup cannot go ahead without insurance which covers, for example, bank guarantees, marketing rights and also acts of terrorism... But there is no question that this will stop the World Cup, which will definitely go ahead."

AXA, like most insurance companies, is reeling from the repercussions of the 11 September attacks. On Thursday, Australian swimmers were told to sign indemnity forms promising that their governing body, Australian Swimming, would not be sued if they were hurt or killed by "acts of terrorism" while competing in three New York meets at the end of November, because insurers refused to cover the trip.

The implications for the Commonwealth Games are not yet known but both the event's insurers and organisers will be watching the outcome of yesterday's developments nervously. The chief executive of Uefa, Gerhard Aigner, said his organisation had been given no immediate sign that its competitions would be affected.

Blatter claimed that AXA had reaffirmed the validity of its insurance cover as recently as 2 October. Fifa has so far paid 16.4 million Swiss francs (£7.5m) in insurance premiums out of a total 27.4 million Swiss francs fee, it said.

AXA, via its German subsidiary AXA Colonia, yesterday defended its decision. "The completely changed danger situation makes a new assessment necessary," said Ingo Koch, a spokesman for AXA Colonia. "There is a need to put in a place a new mechanism for new situations."

Japan and South Korea have already taken steps to heighten security. On Thursday, the Japanese organising committee announced a £4m increase in their security budget.

FA dismayed by new Uefa plans, page 30