Camelot demands new concessions on bid

Camelot has called for the lottery regulator to make further concessions in its dispute over the next licence, despite the surprise resignation of the regulator's chairwoman, Dame Helena Shovelton.

Camelot has called for the lottery regulator to make further concessions in its dispute over the next licence, despite the surprise resignation of the regulator's chairwoman, Dame Helena Shovelton.

Dianne Thompson, Camelot's chief executive designate, issued a series of additional demands yesterday in a bid to capitalise on the crisis surrounding the future of the National Lottery after Dame Helena's departure, announced late on Wednesday.

However, Simon Burridge, the chief executive of The People's Lottery, blamed Camelot for her departure by accusing the company of mounting an "extraordinary vendetta" against her. "They bullied her out of her job. Their only hope of salvaging anything out of the situation is by destroying the whole process and that's what they are setting about doing."

But Ms Thompson insisted that Dame Helena was replaced by a new, independent chairman, to look at their licence bid "with fresh eyes". She also demanded that the commissioners issue public assurances that they would judge Camelot's bid "objectively and on its merits" and publish their full evaluation of both bids.

This, she said, meant that the commission had to "rescind" a statement it issued after losing the High Court judicial review last month that Camelot's rival for the licence, The People's Lottery bid chaired by Sir Richard Branson, was more generous to good cases.

Her statement, issued as Camelot said it had raised its current target of payments to good causes from £9bn to £10.5bn, is the latest phase in the company's aggressive campaign to wrest control of the next lottery licence from Sir Richard, who still remains favourite to win the competition.

In her letter of resignation to Chris Smith, the Secretary of State for Culture, Media and Sport, on Wednesday, Dame Helena spoke of an "intensification of the media coverage... a great deal of which amounts to vilification directed against me personally."

Media criticisms of her handling of the lottery licence competition had become personal. Headlines spoke of "sacking the Dame" and "gratuitous insults" against Camelot. Even as she announced her resignation, the Daily Mail was asking of all five commissioners: "Can this bunch run a whelk stall?" Perhaps fatally, Jack Straw, the Home Secretary, appeared to endorse that criticism last Thursday by suggesting the commissioners should "consider their positions", with a warning they were now "on notice".

But what Dame Helena would not say was that she blamed Camelot for that coverage. Its executives, in turn, are adamant that Dame Helena personally dislikes Camelot. They allege she "coached" Sir Richard on improving his bid, deliberately misled Camelot on its position, and had arrogantly refused to personally apologise for illegally barring Camelot from improving its bid on 23 August.

All these charges are rejected. Her former colleagues believe her resignation is a "personal "injustice". One said privately: "It's a very, very sad thing. From my own experience, Dame Helena Shovelton is as straight and as honest a person as you can get. Dame Helena has done something quite brave and self-sacrificing."

But her resignation is also a direct challenge to Camelot in a high stakes game of bluff. As Ms Thompson confirmed yesterday, Camelot's real goal is to secure a full re-evaluation of its bid or even a fresh start from scratch, by embarrassing the Government into sacking the commission or appointing a new chairman from outside. "Our best chance, clearly, is if the commissioners go and a new process is started," said one source earlier this week.

The commission seems adamant it will not give way any further. It insists it has strict guidance from the High Court to give a full and fair evaluation only to Camelot's plans to address the significant concerns over its software supplier, GTech. Mr Justice Richards did not ask it to reassess any other element of Camelot's bid. But simply buying out GTech's UK operation will probably be insufficient to beat Sir Richard.

According to Dame Helena's evidence to the High Court, The People's Lottery beat Camelot's pledges of money to good causes by 6.9 per cent. Weighed against a projected income for the National Lottery Distribution Fund of up to £15bn under the next licence, that is a significant gap.

The stakes are even higher for Camelot. Having won control of the South African lottery, its plans to build an international business running lotteries require control of the British game. It is the "jewel in the crown". It also made £70m in pre-tax profits last year, paying £26.5m in dividends.

But the remaining four commissioners, now being chaired by Harriet Spicer, a former managing director of Virago Press, have endorsed Dame Helena's challenge. With the backing of the Department of Culture, Media and Sport, they insisted her departure would have "no effect on the process whatsoever."

The commission intends to chose its preferred bidder by the end of November, barely meeting the very tight timescale set by the Branson bid for it to set up a new lottery in time for 1 October 2001.

A commission spokesman said. "It would be strange if we didn't follow through on a process that the judge laid down. This is the process that Camelot wanted. This is what they asked for and this is what they will get. The judge had faith in us to do so, and to be scrupulously fair.

"We're absolutely certain that one bid is more generous than the other and that there is no room for negotiation on that, accept so far as their new proposals could have a justifiable impact on their spending plans," he said.