Government thousands of dollars in damages.

Lawyers for Grape Bay Ltd., who want to open a McDonald's restaurant on the Island, last night revealed they intended to push for compensation from Government.

They are already waiting for a date to pursue the damages in the Supreme Court. Grape Bay, headed by former Premier Sir John Swan, are also hoping for hefty legal costs after a law banning McDonald's was ruled unconstitutional.

The last McDonald's on the Island closed when US forces quit the Naval Air Station at St. David's in 1995. Grape Bay have been embroiled in bitter legal and political rows ever since. And they now want the compensation because of the Prohibited Restaurants Act, which passed into law earlier this year.

The new law banning franchise restaurants with a foreign flavour was branded unconstitutional by Puisne Judge Vincent Meerabux in October. It had only passed when five rebel MPs from the United Bermuda Party voted with Opposition MPs. Every other Government member voted against it.

But Government may still have to pay compensation for barring the burgers.

Attorney General Elliott Mottley will appeal against the "unconstitutional'' ruling on March 16.

But Grape Bay's chief lawyer, Mark Diel, said his clients had suffered financially because of the Act.

He would not reveal how much they were claiming in compensation or costs. But it is understood the figure could run into thousands.

Mr. Diel added: "We take the view that we are entitled to compensation for being prevented from operating whilst that Act had an effect on us.

"We are seeking directions to get back to the Supreme Court to see how much compensation may be determined. There will be a separate hearing for legal costs, held in chambers.'' Mr. Diel, a partner in law firm Smith, Barnard and Diel, believed the costs and compensation hearings could go ahead before the appeal.

But Mr. Mottley believed his appeal should be heard before the financial matters were considered.

He added: "As far as I'm concerned, it will all be dependent on the final adjudication and whether the Act is deemed constitutional or not.'' Smith, Barnard and Diel will close for good on March 31.

The partners will split once the firm is dissolved but it is understood Mr.

Diel will still represent Grape Bay in future proceedings.

RESTAURANT EAT