yesterday in a dispute over the foreign manager's future in Bermuda.

And only an emergency Cabinet meeting -- and an 11th hour climbdown by the Government -- saved one of the Island's most exclusive hotels from closing for good.

The Royal Gazette has learnt that the owner of the Elbow Beach Hotel -- Saudi Arabia's Prince Khalid Bin Sultan -- was left fuming when he learnt that hotel manager Bill Shoaf's work permit was being delayed.

A representative of the Prince flew into the Island yesterday with a final ultimatum to the Government, threatening to pull out of the Island completely unless the work permit was renewed.

It is understood that, following an emergency Cabinet meeting last night, Government has now agreed to allow Mr. Shoaf to stay on in his post.

And The Royal Gazette believes that the threat of a second major hotel closing in a week -- on Tuesday Marriott Castle Harbour bosses confirmed the hotel will close in November with the loss of 300 jobs -- was enough to prompt the Government to backtrack.

Mr. Shoaf was appointed to run the resort by the Prince two years ago but has since had a series of run-ins with staff. His work permit was up for renewal earlier this year.

The Royal Gazette has been told by a source close to the dispute that the hotel's middle management were dissatisfied with Mr. Shoaf's style of management. In the past Mr. Shoaf has also been accused by some staff members of being racist.

And it is also understood that there is a widening rift between the manager and the hotel's Human Resources director, Robert Calderon, who was appointed by the PLP to sit on the Board of Immigration.

Yesterday General Ayid, a senior representative of the Prince, flew into the Island to lay down the law to Government -- Mr. Shoaf stays or we go.

Threat of Elbow closing its doors Last night neither Mr. Shoaf or Mr. Calderon could be contacted to discuss the development.

Premier Jennifer Smith, Immigration Minister Paula Cox and Tourism Minister David Allen were also unavailable.

Bermuda Industrial Union president Derrick Burgess, who was also at the hotel for meetings with staff, also refused to comment on the day's drama.

"The only thing I will say is that I was there,'' Mr. Burgess said.

But Opposition leader Pamela Gordon said the incident gave the new Government a reality check, teaching a valuable lesson that the UBP had understood for years.

"I am very glad that this incident has been averted and that jobs have been saved,'' Ms. Gordon said.

"One thing that's been most important is that we must find a way to rebuild the product and we have to do that in ways that might not be acceptable to the ways perceived by the PLP.

"They are under pressure by supporters who believe that anyone on a work permit should not be allowed to do business. But when people put in such a significant investment to ensure that hundreds of Bermudians are assured work we have to be very careful to recognise that those people want a return on that investment. We have to have a degree of flexibility.

"It was very easy in when the PLP was in opposition to criticise the Government but when the real choice comes you have to weigh up whether or not you put hundreds of Bermudians out of work because of a position taken by someone complaining that they have a bias against one person on a work permit.

"The choice is to listen to that one person or to understand the broader picture. The new Government has to look at both sides.''