A Paget hotel is set to close its doors next month after eight years of service, it emerged last night.

But Palm Reef Hotel general manager and co-owner Bridgett Marshall said she hoped the move would not be permanent.

She told The Royal Gazette : "The Palm Reef Hotel will be closing for the time being, as at November 18, 1997. We will either sell the hotel or find the money to put into it.'' The closure was not the hotel's choice but the Department of Tourism's, she added. "We had no choice. It was taken out of our hands.

"The primary reason for this is the insistence by the Department of Tourism that we should install a state of the art sprinkler system, costing almost $1 million, which clearly is not viable given the current tourism climate.'' However Tourism Minister David Dodwell -- who noted that the department was awaiting confirmation on the news from the hotel -- replied: "I am frankly and personally disappointed the Palm Reef has to close but I take strong exception in having the Ministry of Tourism labelled as being the reason for the closure. The decision was theirs to close.'' The third storey of a hotel had to be equipped with a sprinkler system under Bermuda Fire Service requirements, he pointed out.

This policy was initiated some five years ago and had been complied with by all the Island's hotels except the Palm Reef. If these requirements were not met then the hotel would not receive a Fire Safety Certificate which necessary for licensing by the department.

"It is sequential,'' said Mr. Dodwell. "I do not want to get into a war of words but we bent over backward with Palm Reef to accommodate their financial position.

"Frankly in the interests of the safety of our visitors, the Fire Service and the Department of Tourism took the view that the end of this year was the deadline.'' This deadline for work to begin by the end of 1997 had been in place for over a year, he noted. "$1 million is a huge sum but the process allowed for them to prepare for that over the years.'' Ms Marshall said the hotel attracted fewer high spending tourists. And this had not produced a profitable return on the capital invested. "Indeed the hotel has remained open for the past eight years purely so that our staff can remain employed.'' Mr. Dodwell replied: "Clearly the staff issue is very disappointing. It is one reason why we kept extending the deadline.''