Tourism Minister David Dodwell revealed that talks with Club Med officials had faltered after Government was forced to turn down several demands concerning the hotel's financial position.

Now Mr. Dodwell is awaiting confirmation from Club Med that it still plans to re-open in May, 1997.

Club Med approached Government in February regarding reopening the hotel, he said. Several meetings followed and compromises were reached on all the relicensing requirements -- particularly relating to fire safety, sewage treatment and room standards.

"We bent over backward'' but Club Med wanted more, Mr. Dodwell said last night.

"More recently, Club Med submitted for the consideration of the Government an additional list of areas where they felt the Government should be of further assistance to ensure the financial viability of the reopening of the hotel.

"These areas or concessions sought by Club Med impact upon some core and fundamental policy issues which cannot be changed without considerable debate and time.'' Mr. Dodwell said he could not detail what these concessions were as they were part of the confidential discussions between Government and Club Med.

He said he would make them public as soon as he could.

Other hotels have been pushing for tax relief for the past few years, including cuts in duty for fuel for electricity and on alcohol.

Mr. Dodwell said Club Med were advised that Government would not fill their requests and were asked to confirm their intentions to reopen the hotel in May.

"As we await a response from Club Med, I want to take this opportunity to state that Government has worked diligently in all its dealings with Club Med and indeed has made a number of concessions to ensure that there is no unreasonable obstacle to the re-opening of the hotel in May.'' He added that he was "disappointed'' in the way things had turned out but stressed: "This situation has not reached a conclusion yet.'' "This is only an interim statement,'' he continued. "When we get Club Med's answer we will share it with the community.'' However he admitted: "As more time goes by, it will be more difficult for Club Med to re-open by next year.''