Politics: Millennium boss quits in grant row

The Millennium Commission last night denied that a rift with Peter Mandelson had led to the sudden departure of its chief executive. Colin Brown and Fran Abrams report rumours of 'major rows' surrounding the Dome.

Eric Sorensen yesterday announced that he was leaving as the chief executive of the commission amid rumours of "major rows" over its role in handing out over pounds 1.2bn in grants from National Lottery money.

Mr Sorensen said he would be leaving in March with a six-month pay-off and pension rights with a performance bonus from his pounds 97,500-a-year post after only a year of a four-year contract.

He denied as "absolute nonsense" reports of "major rows" but the rumours persisted at Westminster last night. The commission is separate from the Millennium Experience, the Dome project run by Peter Mandelson, minister without portfolio. Stephen Bayley, the consultant creative director, quit the Dome project last week accusing Mr Mandelson of authoritarianism, a charge the latter denied.

The Dome in Greenwich, south London, also caused trouble last night for the Tories as William Hague faced yet more dissent from his ranks as Michael Heseltine went dramatically "off message" over the project. While the Tory leader and his culture spokesman, Francis Maude, had been directing their fire at the project, the former deputy prime minister decided to speak out in its support, even praising Mr Mandelson.

Mr Sorensen was hired from London Docklands Development Corporation in March last year, to head the commission, which distributes money to projects. After a tough year resolving disputes over the millennium plans, it lost responsibility for the Dome when it was taken over by Mr Mandelson, and its other tasks were reduced.

Mr Sorensen's departure was dismissed as part of a restructuring by Chris Smith, Secretary of State for Culture, Media and Sport, and chairman of the commission. Mr Sorensen issued a press release saying it was "a necessary part of managing the work of a short-life body".

"There have been some major rows in the commission. They have been badly hit by Bayley and they are desperate not to have another open dispute," a senior Tory source said.

Neither Mr Mandelson's office nor the Mr Smith's department was prepared to comment last night but a spokeswoman for the commission strongly denied any rift with Mr Mandelson: "We were well aware that it was the same week as Stephen Bayley, but these stories are complete nonsense. It's very annoying. Eric ... has a lot of admiration for [Mr Mandelson]."

Mr Maude said: "I think there is a real issue here. This is yet another unanswered question in the troubled saga of the millennium project for Mr Mandelson."

Mr Heseltine, however, had kind words. In a BBC interview, he said Mr Mandelson was doing an important job and it was "very understandable" that he should have visited DisneyWorld in pursuit of ideas. Mr Heseltine, who ran the project himself until May, and is a Millennium Commissioner, said: "He is doing the job as well as it can be done. It is difficult and a controversial job to do and there is no easy precedent."