London Eye shareholders in a spin

The designer of the London Eye, the £70m millennium project has accused its operator – the Tussauds Group – of by blocking a refinancing deal.

We first reported on the crippling interest charges in May 2001.

The Eye is owned by the London Eye Company, which is controlled by three equal shareholders: Marks Barfield, the London-based architect which designed the wheel, Tussauds Group and British Airways.

The attraction makes a trading profit but interest payments to BA led to a loss of £11 million on revenues of £38 million in 2002.

David Marks said he had been trying to renegotiate the terms of the debt, which stemmed from a £56m loan from BA in 1999, with his fellow shareholders for the past three years without success.

He said that BA supports the Eye's refinancing but added: "Tussauds is blocking it. At every turn they have sought to gain overall control of the company we created."

A senior insider at Tussauds told the Daily Telegraph that there were private concerns about falling visitor numbers at the Eye, down 400,000 or 10 per cent to 3.6 million people last year, which could cause a problem when the debt was refinanced.

A spokesman for British Airways said yesterday: "We are committed to refinancing, finding a way forward to give the Eye profitability and long term stability."