Finance Minister Grant Gibbons yesterday fiercely rejected repeated claims Government had flouted its franchise policy.

Government has run into controversy over its approval of the incorporation of Grape Bay Ltd.

The company -- run by ex-Premier Sir John Swan and Government backbencher Maxwell Burgess -- would operate a McDonald's restaurant in Bermuda.

And the incorporation has triggered accusations Government ignored its own anti-franchise policy and a Bermuda Monetary Authority circular.

On Friday, rebel United Bermuda Party backbencher Ann Cartwright DeCouto tabled the Prohibited Restaurant Act 1996 when the House of Assembly reconvened.

The bill would restrict the operation in Bermuda of restaurants associated with overseas ones.

Yesterday Dr. Gibbons, however, strongly defended Grape Bay's incorporation.

And he took The Royal Gazette to task for repeating accusations Government had breached its own franchise policy.

"The facts are clear. The incorporation of Grape Bay Ltd. complied completely with original Franchise Policy issued by the Ministry of Finance in January, 1995.

"It was this policy that was later recirculated by the Bermuda Monetary Authority in May, 1995.

"The Grape Bay incorporation also complied with the Companies Act, 1981, on which the Government Franchise Policy is based and on which the policy depends for its legislative force.'' Dr. Gibbons added: "While it may suit the purposes of those who disagree with the Grape Bay decision to say that the incorporation contradicted Government's Franchise Policy, I would hope that the daily paper would check the facts before continuing to print this particular allegation, over and over again.'' RESTAURANT EAT