revealed last night.

Bermuda Financial Centre Ltd. was apparently squeezed out of developing the old hotel site when insurance companies ACE Ltd. and Exel Ltd. announced they wanted to build offices.

But yesterday BFCL director James Pearman said the company was in talks with an overseas investor about raising $100 million to build a hotel and offices.

BFCL also launched a blistering attack on the ACE/Exel scheme -- which they claimed could set a dangerous precedent for ownership of land by non-Bermudian companies.

Last month the companies agreed to buy-out Winson Holdings Ltd. -- the owners of the derelict hotel -- from Argus Insurance.

To bypass Bermuda's 60/40 ownership rule, the two companies put forward the Bermudiana Site Rehabilitation Act 1996 -- a private act that will seek permission to buy Winson -- to the House of Assembly.

The Bermudiana site was taken over by Argus, through Winson Holdings, after BFCL was unable to repay loans.

Mr. Pearman yesterday said: "We are in discussion with a potential source of money which would enable us to pay Argus and leave enough money to develop the site.'' He said he was not able to reveal who the source was but said it was overseas and that he hoped to meet executives next week to discuss the proposal.

If BFCL got backing, Mr. Pearman said he hoped to progress with the hotel and office plans -- for which BFCL already has planning permission -- but would talk to ACE and Exel about their needs.

Meanwhile BFCL released a statement yesterday which attacked the ACE and Exel plan for the Bermudiana site.

The statement was issued by Mr. Pearman and BFCL president Neville Conyers who said they "viewed with concern'' the public silence to the Private Bill submitted by Ace and Exel "which will allow 100 percent ownership of the land of the Bermudiana site by those exempted companies''.

"We have also been advised that active lobbying of the members of the Private Bills Committee is being undertaken at this time.'' The statement listed six grievances: Ownership of land by foreigners, except hotels, has not been permitted for several decades.

BFCL was given planning permission based on having a hotel on the site, which the ACE/Exel proposal does not include.

Building challenge The statement said: "If the situation is now to be that the site is to be developed for offices only, it would seem only right that the Bermudian company should be given the opportunity before non-Bermudian entities.'' BFCL is a Bermudian company, traded on the Bermuda Stock Exchange and open to ownership by anyone.

The Private Bill approach is an attempt to gain an exemption to the 60/40 rule by ignoring the approach other companies have taken.

BFCL has made repeated attempts to meet ACE and Exel. The statement says: "It would seem that ACE and Exel are only interested in doing this project by themselves.'' If the Private Bill passes it will not be long before other exempted companies follow suit and ask for permission for more Bermudian land to be sold to non-Bermudians.

"BFCL is confident that the members of the Private Bills Committee will fulfill their responsibilities to Bermuda and to the people of Bermuda and look at this very carefully,'' said the statement.

TOURISM TOU