London Olympic stadium deal collapses

By ROB HARRIS | October 11, 2011 | 7:00 AM EDT

FILE - This is a Tuesday, Jan. 19, 2010 file photo of the West Ham United co-owners David Sullivan, right, and David Gold as they pose for photographers at Upton Park stadium, London. The deal to award London's Olympic Stadium to West Ham football club after the 2012 Games has collapsed due to mounting concerns about legal challenges over the bidding process, the British government said Tuesday. (AP Photo/Tom Hevezi, File)

LONDON (AP) — The future of London's Olympic Stadium will be opened up to a new bidding process after a disputed deal to award the flagship venue to West Ham soccer club was scrapped amid mounting legal challenges.

The $760 million stadium will remain in public ownership after the 2012 Olympics and be rented out to an anchor tenant, the government said Tuesday.

West Ham said it will bid again under the new terms that could be more financially favorable for the east London club, which was relegated from the Premier League in May.

The drawn-out wrangling for control of the stadium has been increasingly acrimonious since West Ham was selected ahead of London rival Tottenham in February as the long-term tenant.

"The action we have taken today is about removing the uncertainty — the process had become bogged down in legal paralysis," British sports minister Hugh Robertson said. "We know there is huge interest in the stadium out there from private operators and football clubs and crucially we remove any uncertainty.

"This is not a white elephant stadium where no one wants it. We have had two big clubs fighting tooth and nail to get it."

Tottenham mounted a full legal challenge against the decision by West Ham's local authority to provide a $63 million loan to fund the second-tier club's move into the stadium. The case was due to be heard in court next week.

Fourth-tier east London club Leyton Orient was also challenging the decision, while an anonymous complaint to the European Commission about the apparent use of Newham Council funds by West Ham fueled concerns that the legal disputes could drag on for years.

Robertson also said the Olympic Park Legacy Company received a letter from Newham on Monday saying that "because of the uncertainty they no longer wanted to proceed."

"That was the straw that broke the camel's back and we thought it better to stop it dead in it tracks now," Robertson said.

Under the new process, the tenants would pay an annual rent to the Olympic Park Legacy Company, which should actually prove to be less costly for the likes of West Ham.

Some $55 million has already earmarked under the Olympic budget to downsize the stadium from an 80,000 to a 60,000-seat facility after the games.

One certainty is that the running track will remain in the stadium regardless of the outcome, with London bidding to host the 2017 world athletics championships. Doha, Qatar, is the other candidate.

"It's fantastic for UK Athletics and it is a bold and decisive move by the legacy company," UK Athletics chairman Ed Warner said.

West Ham had planned to retain the running track after leaving Upton Park, but Tottenham proposed knocking down most of the stadium and building a 60,000-seat, soccer-only venue on the same site without any athletics legacy.

London Mayor Boris Johnson insisted the stadium would not become a burden to the taxpayer.

"I am confident that this decision is the best way to ensure we have certainty over the stadium's future," he said. "I believe it will also put us in the place where we always intended to be — delivering a lasting sustainable legacy for the stadium backed up by a robust but flexible business plan that provides a very good return to the taxpayer."

Leyton Orient chairman Barry Hearn confirmed his club would also bid for the stadium, including the possibility of sharing the ground with another club.

"The OPLC have finally listened to someone with common sense and said, 'We messed it up before, let's not mess it up again.' The whole process starts now," Hearn said.