The US Consul General has started house-hunting.

US officials have been viewing properties all over the Island seeking a suitable replacement for the multi-million dollar Chelston in Paget -- which had a `for sale' sign slapped on it last year as part of an American government cost-cutting exercise.

Individual properties seen have not been disclosed -- but staff at the US Consulate have viewed potential new homes for US Consul Robert Farmer and his successor Vin Gupta everywhere from St. George's to Somerset.

US Consulate General deputy principal officer Bruce Berton said: "We have looked all over the market in terms of houses and property.

"We have been asked to hire an attorney, to view some prospective replacement properties should Chelston be sold and find out how much it would cost to get an accurate appraisal of the property. Once we get all that information together, they will likely send a team down here to look at some of the same things -- market conditions and how the market works.'' But the US Consul is unlikely to have to move into a studio flat -- even with the American insistence that the costs of overseas representation must be slashed.

The new property, however, will have to be more modest than massive Chelston mansion, set in 14 acres of landscaped gardens, complete with beach house and private beach.

Mr. Berton said: "We would be looking for something with room to roam with some properly-sized entertainment spaces and a decently-sized house in general.'' The US will also have to consider security arrangements -- even in low-risk Bermuda.

And that is likely to rule out a house fronting on to a road -- and those with small gardens.

The Royal Gazette revealed last December that a relative of British media baron Viscount Rothermere had been eying Chelston -- estimated to be worth at least $12 million.

Esmond Harmsworth, a descendant of the brothers who founded the top-selling UK Daily Mail runs the US arm of the Associated Newspapers media empire and lives in Boston.

Mr. Berton said: "We have not shown Chelston to anyone and have no plans to do so at the present time.

"I have not received any expressions of interest, but we have had calls from agents who are interested in listing the property and who have said they have had people interested.'' Mr. Farmer confirmed in November that individuals from Bermuda and elsewhere had been in touch with the US authorities with a view to buying Chelston.

The future of Chelston has been under threat since 1996, when NBC targeted it in a special report on the cost of the US diplomatic service called "The Fleecing of America''.