The hotel which owns the land on which a controversial cellular tower is being built could still pull the plug on the project.

Yesterday Southampton Princess general manager Norman Mastalir admitted that staff morale at the hotel had plummeted since work on the tower began.

And he agreed that it was becoming "increasingly difficult'' to honour the lease agreement with Bermuda Digital Communications, the company that is building the tower.

The land on which the tower is being built at Faraway, Warwick, is owned by the hotel chain's parent company, Canadian Pacific Hotels.

Last week hotel staff housed in accommodation close to the proposed site put in a request to be re-housed after claims that emissions from the tower could be a health risk.

Hotel management have now said it is becoming increasingly difficult to run their own operations at both the Southampton and Hamilton Princess hotels because of plummeting staff morale.

About 70 staff members and their families live in accommodation near the site.

Although that only represents about 15 percent of the combined workforce of the two hotels, morale has been adversely affected.

"We have advised Bermuda Digital Communications of that information and advised them that it's becoming increasingly difficult to honour the terms of our lease because of the concerns of our employees,'' Mr. Mastalir said.

"We have certainly advised them that this situation is starting to affect morale. I think the staff are very serious about their concerns -- I don't think they have any intention of dropping it and they are looking to us as employers to take good care of them which is what we're trying to do.'' "I had a call from BDC this morning and they made some comments but we are waiting for a response from our last communication.'' Mr. Mastalir added the company's legal team in Toronto was continuing to examine the lease agreement with BDC in search of a possible get-out clause.

The agreement was signed by the property's previous owners and Canadian Pacific Hotels adopted the contract when they bought the site.

Construction workers have already laid the foundations for the antenna, which will be used for CellularOne cell phones.

Last night BDC representatives were unable to comment on the latest developments.

But they have consistently insisted that the tower is safe and meets international standards.

ENVIRONMENT ENV