reopening the St. George's hotel next year.

The move is aimed at deciding whether Club Med is in breach of its lease with Government.

And it comes after the company presented conditions to reopen Club Med in St.

George's as a timeshare property -- something opposed by the Progressive Labour Party.

Government, however, told the company a wide-ranging tourism study would have to be carried out first.

This would cover trends in tourist properties, timesharing and condominium ownership.

Tourism Minister David Dodwell told the House of Assembly yesterday that the survey would be conducted with the best interests of all Bermuda hotels in mind, not just Club Med.

And it was likely to take six to nine months to complete.

"Therefore, Mr. Speaker, I have advised Club Med that if they wish to continue to pursue the reopening of Club Med as a timesharing establishment, they must wait until the study of trends in visitor accommodation is completed and the findings used to shape the future course of Government policy on such matters.'' He added: "At the same time, I have informed Club Med that court proceedings will be reactivated immediately with the appointment of an arbitrator to settle the issue of whether Club Med is in breach of the lease with Government, pursuant to determining the lease.'' Mr. Dodwell said the court action could drag on for two or more years.

He later declined to speculate to The Royal Gazette whether legal action would be called off if the tourism study cast Club Med's timeshare scheme in a favourable light.

Shadow Tourism Minister David Allen told The Royal Gazette he was not surprised by Mr. Dodwell's announcement. And he urged Government to reclaim the property through any legal means possible.

He also declared the PLP's opposition to a timeshare proposal.

"Government should get the property reopened and redeveloped for the interests of St. George's and Bermudians as a whole.'' The 340-room property overlooking Fort St. Catherine has stood empty since closing in 1988.

Mr. Dodwell told MPs the economic impact of the hotel closure on St. George's and the East End had been significant.

"Lost employment opportunities, coupled with the loss of tax dollars and reduced revenues in the retail and service sectors have challenged St.

George's.'' Recently, Mr. Dodwell said Club Med had approached Government with hopes of reopening the hotel in May 1997.

But Club Med later spoke of reopening in spring, 1998 while it negotiated with a company, publicly traded on the New York Stock Exchange.

Club Med legal action re-opened Yesterday Mr. Dodwell said this company -- although relatively young -- was well known as a timeshare and vacation ownership developer.

Club Med, he added, saw an opportunity for a joint venture to resolve the ongoing challenge of operating their St. George's Cove property.

Mr. Dodwell said a list of amendments to the Timesharing (Licensing and Control) Act 1981 and the property lease was then presented.

These were considered necessary by Club Med for providing them with an appropriate environment in which to operate comfortably in Bermuda.

The conditions, said Mr. Dodwell, included removing almost entirely the regulatory controls from the Timesharing Act and extending the current timeshare ownership from 25 years to 99 years.

Others included granting work permits to Club Med staff and timeshare salespersons to work in Bermuda, Customs duty deferrals and deferral of gratuity payments to workers in the hotel.

"After considerable consultation and discussion, Government felt it had no choice but to inform Club Med today that their list of concessions and conditions could not be considered until such time as a comprehensive study of trends in visitor accommodation could be conducted, including hotel, timesharing, vacation ownership, condominium ownership, and more -- with, not just Club Med, but the entire hospitality industry of Bermuda in mind.

"Such a study is likely to take six to nine months and it is anticipated that the findings may be applied in the best interest of Bermuda as a whole.'' Mr. Dodwell accepted the news would be greeted with dismay by MPs.

"I am convinced, however, that it is not in the best interest of Bermuda to give Club Med any special privileges, at the expense of all the other licensed hotels on the Island whose very existence over so many years has proved their loyalty to Bermuda as good corporate citizens who contribute much to this community.'' Mr. Dodwell said arbitration and any subsequent court proceedings could take some time, perhaps as much as two or more years.

"However, the anticipated outcome is that Bermuda will regain possession of the lease.

"By that time, with the study of trends in visitor accommodation completed, it is expected that Government will be in a position to implement a comprehensive, ready-to-go plan to redevelop the property into a thriving and profitable place of visitor accommodation, tailor-made to Bermuda's needs in the new millennium.'' Mr. Allen told The Royal Gazette the PLP had expressed concerns over Club Med for many years.

"Two years ago I urged Government to make attempts to break the lease and get the property back because of Club Med's failure to open the hotel and negotiate in good faith.'' He added: "We believe Government should persist with litigation and last week I called for an increase in pressure from the legal front.'' Mr. Allen said the PLP was concerned that timesharing would create few jobs for Bermudians.

"Having hotels resort to timesharing will undermine employment of Bermudians and retail sales,'' he said.

Mr. Allen believed Club Med should be placed under a quango, similar to the West End Development Corporation: "Various components of the building could be leased to separate entrepreneurs and turned into restaurants, entertainment and sports facilities and shops.''