Duke's firm abandons Legacy bid for Dome

The troubled £125m bid by Legacy to buy the Millennium Dome was plunged into further crisis last night after a consortium including the Duke of Westminster abandoned plans to join the project.

The troubled £125m bid by Legacy to buy the Millennium Dome was plunged into further crisis last night after a consortium including the Duke of Westminster abandoned plans to join the project.

In an embarrassing decision, a group of companies headed by the property company Quintain Estates told the Stock Exchange it would not become a partner in Legacy's bid despite widespread speculation that the deal was secure.

To Legacy's embarrassment, their formal announcement came an hour before a crucial 4pm deadline yesterday for Legacy to answer major concerns in Government about the commercial viability of their proposals.

However, Legacy's supporters attempted to regain the initiative by confirming that a Leeds-based property company called Teesland Group, involved in leisure and retail developments around Britain and Ireland, had taken a stake in their consortium. The company will also become lead project manager for Legacy's "Knowledge City" development.

Their partner's name was leaked to head off damaging speculation about the viability of their bid, only two days before a ministerial sub-committee headed by John Prescott, the deputy Prime Minister, meets to give Legacy's bid the go-ahead.

Ministers have put Robert Bourne, Legacy's chairman, and his major backers, the Dublin-based property developers Treasury Holdings, under intense pressure to "augment" their bid by attracting other major investors and prove they have enough tenants for their proposed hi-tech business and research park.

The statement from Quintain's consortium, which includes the property company owned by the Duke of Westminster, Grosvenor Estates, came several hours after Mr Bourne had met Lord Falconer of Thoroton, the minister for the Dome, and other officials in Whitehall yesterday morning to discuss Legacy's progress in meeting these demands.

In a statement which will further damage confidence in the viability of Legacy's proposals, Quintain, which already owns a 12-acre block close to the Dome site, said they had been invited by Legacy to examine its proposals. However, it added, "the assessment has now been concluded and the consortium has decided not to enter into negotiations to become a partner with Legacy."

Despite this setback, Legacy officials insisted yesterday they were confident the deal would go ahead. A spokesman said: "There is support out there for our proposals... and we are satisfied with the progress we are making."

In a development which underlined the nervousness surrounding the Legacy bid, officials at the Dome confirmed yesterday that two zones being sought by a rival group of bidders led by Pierre-Yves Gerbeau are being held back from this month's auction of the Dome's contents.

A New Millennium Experience Company spokesman said: "We have to keep all options open until an agreement is actually signed with Legacy. The sensible thing to do is ensure that we don't sell anything that would close down alternative options," he said.