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LONDON-The mayor of London, Ken Livingston, has threatened to purchase the London Eye–the now iconic Ferris wheel in the heart of the city–unless a row over its future is settled. The dispute was sparked by the decision of landowners to put up the rent on the site. South Bank Centre, the government-appointed body that owns the site and is headed up by Lord Hollick, wants to raise the rent from euro 94, 580 ($118,740) a year to euro 3.63 million ($3.13 million). But a source familiar with the situation said the Eye’s owners, Tussauds, cannot afford this and had refused to pay. SBC responded by sending an eviction notice.

Mayor Livingstone has threatened to intervene. “It may very well be, if matters can’t be resolved soon, we would move very quickly to a compulsory purchase of the London Eye,” he states.

Meanwhile, Tussauds let it be known that it was looking for another site and early this week a French consortium offered to move the Eye to Paris. A spokesperson for the consortium boasted on national television that they would use the wheel as the centerpiece of their bid for the 2012 Olympics.

Either option would have been hugely embarrassing for the British government and a setback for London’s Olympic bid as the Eye features prominently in the marketing literature. The Conservative Party culture spokesperson, Theresa May, warned that if the Eye was forced off its South Bank site it would “send a signal” to Olympics chiefs because the Eye is used prominently in London’s campaign brochures for its 2012 bid. A decision on the rent is due in July, days before a final decision on the Games.

“The Eye is a prominent feature in all of the London Olympic bid promotional activities,” May states, “yet at the same time its future is in jeopardy. It is now essential that everything be done to end this unnecessary stand-off and prevent the Eye’s closure.” She adds that “the issuing of an eviction notice by the South Bank Centre is a step too far” and called on the government to intervene.

But a statement issued by the office of the Culture Secretary Tessa Jowell says that it would be wrong for ministers to interfere. She dubbed the rent dispute “brinkmanship–an essential part of the negotiation”.

The Eye, which was financed in part by British Airways, cost euro 123.86 million ($155.27 million) to build for the Millennium celebrations. Overnight it became one of the top five tourist destinations in Britain and now generates euro 58.20 million ($73.97 million) a year in revenue.

But despite this turnover, Tussauds argues that the rent increases are unaffordable because much of its revenue is taken up servicing the original development loans. Debts now total euro 218.60 million ($274.92 million) and are growing by euro 36.38 million ($45.67 million) a year.

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