Government and Southlands Ltd. have been locked in talks for the last two days over the Morgan's Point land swap deal, The Royal Gazette can reveal.

Neither side would comment yesterday on how negotiations have progressed but this newspaper understands that the meetings were positive and that the exchange is looking more likely than two months ago.

On February 22, Southlands co-owner Brian Duperreault claimed that Premier and Tourism Minister Ewart Brown did not want to exchange public land at Morgan's Point for the 37-acre Southlands estate in Warwick.

He accused Government of dragging its heels on the deal, which was agreed two years ago, when Dr. Brown said it was "most likely" that Southlands would become a national park when the swap was completed.

Government claimed the exchange was delayed because global insurance chief Mr. Duperreault and his fellow Southlands Ltd. directors Nelson Hunt and Craig Christensen failed to come up with a proper plan for a luxury tourist resort at Morgan's Point.

The public row fizzled out on March 16 when Southlands Ltd. presented hotel plans for the former US Naval Annex in Southampton to Cabinet and PLP politicians.

Both sides have been silent since but this newspaper understands that much work has gone on behind the scenes and that Government has been impressed by John Ryan and Egbert Perry, the overseas developers working with Southlands Ltd.

Yesterday and Thursday saw two full days of meetings involving Mr. Ryan and Mr. Perry, who are believed to be complying with Government's requirements for the 240-acre Morgan's Point plot at a fast pace.

Dr. Brown has said the area is Bermuda's last parcel for prime development and careful consideration must be given to its future.

The land swap deal would give Southlands Ltd. ownership of 80 acres of the site and a lease on the rest of the land, with Government retaining 40 acres.

Mr. Christensen was present at this week's meetings but his two partners were not.

Southlands Ltd. agreed last month not to talk to the press about the land swap deal or reveal its plans for Morgan's Point to this newspaper.

But the company held a series of meetings on March 16 for politicians and environmental groups to outline the proposals.

A source who was at one of the meetings told this newspaper: "They showed us sketches, drawings of various parts of the development. They showed us an overall schematic of the Morgan's Point area, where you could see the buildings and the golf course.

"They showed us pictures of what the hotel would like. There's a club house, a golf course and they are going to have the hotel out on the end of the Point.

"There were condos on the pier and a little boutique hotel and some fractionals at the little marina. The main hotel looked like it would have about 300 rooms and the number for the boutique hotel varied between 50 and 80."

The source added: "It looked very good, really good. I was impressed by the people who were working with Southlands. They had partners in construction, bankers, financiers. They appeared to be right on top of what was involved.

"They talked about the need to get this moved forward and they said this would be a stimulus package for Bermuda."

The proposed development would cover 8.7 percent of the former base land, according to the source.

A Government spokesman said in February that Southlands had indicated that their multimillion dollar resort was likely to be a Ritz-Carlton, due to Mr. Ryan's relationship with the five-star brand.