investors to buy the Bermudiana Hotel site.

And last night Finance Minister Grant Gibbons signalled that an application to relax the 60:40 Bermudian ownership law could be looked on favourably.

Under the rule, local companies must be at least 60 percent Bermudian owned -- although the Finance Minister has discretion to vary it.

Yesterday, Bermudiana owners, Argus Insurance, said the rule was a stumbling block to attracting rich overseas investors to the site.

"We need overseas investment for a property of this size,'' said Argus managing director John Sainsbury. "There is a certain amount of phobia about non-Bermudian ownership of the site.'' But Dr. Gibbons said there had been several instances over the years where special circumstances dictated a relaxation of the rules.

And he said: "What we do is to look at the individual circumstances and cases. There is nothing to stop someone applying for exception.'' Dr. Gibbons said the Ministry would have to see a detailed case from Argus Insurance before making a decision.

Argus took over the five-acre property earlier this year from Bermuda Financial Centre (BFCL).

BFCL had been locked in a fierce battle against time to raise funds for a $150 million phased development of the site, which was to include a hotel, offices and luxury homes. And it had loaned money from Argus.

But after repeatedly failing to meet loan repayment deadlines, Argus took over the property off Pitt's Bay Road.

Since then, BFCL have announced plans to raise money to buy back the site.

Also interested in the property has been Villa Development Company, run by Anthony Smith, father of Sport Minister Tim Smith.

But the company's multi-million-dollar office and restaurant scheme was thrown out by planners in May.

The proposal included a central plaza with office space -- believed to cover 571,000 square feet -- 18 homes, shops, restaurants and a public park on the outskirts of Hamilton.

The Development Applications Board said the complex would be out of keeping with the surrounding area.

Yesterday, Mr. Sainsbury said Argus was still trying to sell the property, which had become an "eyesore''.

"We've had periodic inquiries from various types of parties, but nothing really is developing at this stage.

"It's a large project that needs some kind of international financing. The ingredients have to be right.'' Mr. Sainsbury continued: "BFCL is still working on trying to put a hotel complex together, and I believe they have applied for building operations if necessary. I have heard nothing from them for some weeks.

"And I've heard nothing from Mr. Smith for a number of weeks. We are independently trying to put something together, but we never thought it would be easy.

"BFCL tried for two and a half years without success and we did not expect to solve the problem very quickly. The main difficulty for us is ownership of the site.'' Mr. Sainsbury said Government could provide a solution if it waived the 60:40 rule.

"We've had a number of approaches from non-Bermudians overseas and in Bermuda. The solution has to be ownership. This property is too big for Bermuda at this stage.'' But Dr. Gibbons said: "The Companies Act specifies the current economic circumstances have to be looked at and the likelihood of a Bermudian bid under the 60:40 rule which does include foreign financing.

"One has to recognise the 60:40 rule was put in place to protect Bermuda and Bermudian business,'' he said. "When you get into larger projects where foreign financing is required, there may be a case for the 60:40 rule to be looked at.'' GOVERNMENT GVT