The scale of burger giant McDonald's plans for Bermuda were revealed in court yesterday.

And a letter from the US firm unveiled their intention to blanket Bermuda with a chain of hamburger restaurants if possible.

Solicitor General William Pearce told the Court of Appeal that McDonald's had said they were "not interested'' in a single restaurant in Hamilton.

And he added that the US firm had said that the cash Grape Bay Ltd. would have to come up with "depended on how many could be placed.'' The news came on day one of an appeal by Mr. Pearce against a Supreme Court decision to rule the anti-fast food Prohibited Restaurants Act illegal under the Island's Constitution.

A 1996 letter from McDonald's US agents to Grape Bay said: "It is our goal to intelligently develop the market with as many restaurants as possible as we are not interested in placing a single restaurant in Hamilton.

"Therefore, the capital amount will depend on how many restaurants should be placed into the market.'' Earlier, Grape Bay lead lawyer Mark Diel failed in a bid to have a just-signed development agreement introduced as further evidence of a binding contract between the Bermuda firm and McDonald's. But Sir James and colleagues Mr.

Justice Michael Kempster and Mr. Justice Edward Zacca ruled that they would decide the case based on the facts at the time the Prohibited Restaurants Act was signed into law in August last year.

Mr. Pearce -- appearing with Jamaican constitutional law expert Dr. Lloyd Barnett -- told the three-judge Court of Appeal under president Sir James Astwood that the Grape Bay/McDonald's link-up had to be looked at under two different sections of the law.

He claimed that not only did Grape Bay need a licence from McDonald's before they could operate, but McDonald's would also have to get a permit from Minister of Finance Grant Gibbons.

And he added that if the opening of a McDonald's needed that extra permission, Grape Bay could not have been deprived of anything under the Act.

In October last year, a Supreme Court judge ruled that Grape Bay's contracts with McDonald's and others were property rights -- which are protected under the Constitution.

The judgment overturned the controversial Act, forced through the House of Assembly by a Government "Rebel Five'' with support from the Opposition Progressive Labour Party and signed into law by Governor Thorold Masefield just a month before the successful Supreme Court action.

Grape Bay -- controlled by ex-United Bermuda Party Premier Sir John Swan -- wanted to open a McDonald's at the Airport, for which it already holds a Government lease, although the lease has yet to be ratified by Parliament.

Puisne Judge Vincent Meerabux's Supreme Court judgment backed Grape Bay's claim that the agreements with McDonald's and others were real contracts.

But Mr. Pearce insisted yesterday: "There was a lot which had to be done -- there is no evidence of market analysis or cost analysis.'' And he insisted all the detail of a proper contract between the two firms was "subject to further negotiation.'' Mr. Pearce added that McDonald's projected itself as being in the restaurant business.

But he said: "It has two personas -- the suggestion is the restaurants are owned and operated by McDonald's. They present themselves to the world as being in the restaurant business.'' He added: "In reality, McDonald's business is selling franchises and licences to use the McDonald's name.

"They help franchisees get started up on location and in doing quality control on the products to check how the restaurant is operating -- when you look at the legal analysis, they are licencing and supervising franchises.'' Mr. Pearce added any joint venture between Grape Bay and the burger giants would be seen as a McDonald's restaurant -- not a Grape Bay one.

And he said -- in reality -- McDonald's, as well as Grape Bay, would be carrying out their business in Bermuda if a burger restaurant was allowed to open.

Mr. Pearce added: "It's doing its business in Bermuda -- that's what it would do under the terms of the agreement in Bermuda.

"And that makes them engaged in the carrying on of business in this Country, in my respectful submission.'' He said: "The operative word is `carrying on business'...different from the requirement that the company is controlled by Bermudians.

"Grape Bay is a Bermudian company -- you are looking at the business which is being conducted here.

"If we have permits, they are both carrying on business in different aspects of the same business.'' And he added: "The crux of a business is making money -- on every burger sold, McDonald's would get ten percent or whatever.

"Every dollar which went over the counter would be a McDonald's dollar.'' The hearing -- expected to last up to a week -- continues.

RESTAURANT EAT