Developers of the $90 million Morgan's Point resort in Southampton have received a massive boost.

Government has revealed that any cost incurred by the company in cleaning up the former US base will be repaid if the Americans agree to pay for the mess left when they pulled out.

Morgan's Harbour Investment Ltd. is ready to pay $12.5 million to clean up waste oil and other debris on the Southampton annex.

They decided to forge ahead alone after talks between Bermuda, Britain and the US dragged on over who will pay for the mess.

Yesterday Development and Opportunity Minister Terry Lister confirmed when an agreement is reached with the US Government, then the company will be reimbursed.

And he confirmed that talks over further liability, if no unexpected problems were encountered during construction work, were continuing.

But he added that it was a difficult subject as possible problems at Morgan's Point, which include oil underground, were somewhat unknown.

"The clean-up issue is holding up what we want to do with Morgan's Point. We are very unhappy about it,'' he said.

"If we could get the US to agree, that would take a big question mark away from an exciting project.

"The happiest outcome would be the US agreeing to clean up or putting the cash on the table to complete the clean-up, then reimburse the various parties for amounts paid out.'' And he said the clean-up issue had now been raised at the US Senate Arms Committee, after one senator had taken up their case and written to the committee chairman.

Mr. Lister said they had had frank discussions with the US over the clean-up, which also involves the debris left at Southside, and they continued to press over the issue which could cost a total of $60 million.

But, he warned, it would be all or nothing, either the entire bill was footed or not at all.

Morgan's Harbour Investment Ltd. want to turn the Southampton site into a village, hotel, golf and marina development, with provision for housing.

They have already spent $4 million on preparations but are keen to seek reassurances over any unknown "nasties'' lurking underground.

And they want to see negotiations with the Government concluded so they can start work.