A rival developer yesterday lodged an appeal against plan by two insurance giants to build offices on the derelict Bermudiana Hotel site.

British businessman Peter Clayton launched the appeal against ACE Ltd. and EXEL Ltd. on the 21-day deadline.

Last night spokeswoman for ACE Ltd., Kirsten Badenduck, said the company was aware of the appeal, although they had not seen its grounds.

She added: "We think it is a terrible shame. Everyone was ready to see the building removed and progress being made.

"We feel that the people of Bermuda will be the ones that will suffer if this gets dragged out.'' EXEL's CEO Brian O'Hara said he was unsure on what grounds Mr. Clayton was appealing.

However he added: "It would be a shame if it causes a delay in our efforts to bring down that building.

"I have not heard of anything that gives any kind of credibility to the appeal.

"All he is going to achieve here is a delay in what I think everyone in Bermuda wants to happen, that is the removal of that pink elephant.'' Last month the Development Applications Board granted ACE and EXEL planning permission in principal to build offices on the land.

As soon as permission was granted they signed a deal buying the site from Argus Insurance in a deal valued at about $18 million.

Mr. Clayton took over the Bermuda Financial Centre Ltd., which had failed to raise cash to press ahead with a plan for offices and a hotel on the Bermudiana site although it had won planning permission.

He resurrected BFCL's plan in an 11th hour bid to build on the site, but failed to prevent the DAB from giving the go-ahead to ACE and EXEL.

Both companies have stated publicly that they are not interested in joining forces with Mr. Clayton and want to develop only offices.

Yesterday he lodged the appeal which will be heard by the Environment and Planning Minister Irving Pearman.

It has been lodged on four grounds: Erection of offices will destroy the potential beauty of the panorama and as well as a significant economic opportunity for the Country.

That the area is earmarked for a mixed use development of offices, shops and a hotel and not just offices.

The BFCL plan would generate foreign income as well as 200 jobs for Bermudians.

That no decision should have been taken until a case being heard before the Privy Council which has major implications for Bermuda's planning rules is finished.

Retired hotelier David Barber is challenging a decision by a former Planning Minister to allow ACE Ltd. to build a third story on its Woodbourne Avenue headquarters.

Mr. Barber's attorneys are arguing that the Planning Minister is bound by the 1992 Development Plan which puts specific controls on the height of buildings in the Woodbourne Avenue area.

Government argues that the Plan is not binding on the Minister who can exercise discretion.

The BFCL appeal says the DAB should have refused permission because the ACE/EXEL plan deviated the 1992 Plan which "gives preference'' to a mixed use of offices, shops and hotel.

"We contend that pending the outcome of the ACE/Barber case that the granting is in violation of the authority of the Board and should be rescinded as it clearly does not comply with the publicly stated land use criteria, i.e. mixed use,'' says the BFCL appeal notice.

It adds: "Our approved planning permission has the element that the DAB are on record as demanding for the site and no such requirement has been made in the approval now granted to ACE and EXEL and this is unfair and inequitable.'' Last night Mr. Clayton said: "If we are successful in our appeal ACE and EXEL will be stuck with a piece of land and unable to proceed with their plans.

"They will either talk to us or tell us to go to Hell. We would buy the land from them and we would build offices for them.''