Top level negotiations on a $220 million scheme to build a five-star hotel at the former Club Med site in St. George's have stalled.

It had been expected that a prestigious Four Seasons Hotel would be built on the hill overlooking the town to replace the closed down resort that has lain empty for a number of years.

But has learned discussions between a Canadian-based consortium and Government have ground to a halt although the hotel developers, who have enjoyed an extended period of exclusivity to finetune plans for the site, have indicated they have the necessary finance in place and are ready to roll with their scheme.

Last night the reason for the deadlock remained unclear with neither side were prepared to disclose what had brought two years of negotiations to a halt.

Deputy Premier and Tourism Minister Dr. Ewart Brown was apologetic as he gave a "no comment" response to questions on the matter from .

The St. George's Renaissance Consortium, which has previously put forward a vision of a new hotel and piazza-style colony housing for the site, said it remained primed to go ahead with its scheme but was now awaiting Government's next step.

Consortium leader Wanda Dorosz, said: "The St. George's Renaissance continues to have $220 million of financing commitment for the St. George's Club Med site. "Our five star hotelier remains willing to proceed pursuant to our executed letter of intent. Our collective remain willing to proceed, however negotiations seem to have stalled. We await the Government's next move."

The Four Seasons hotel scheme would involve demolishing the empty Club Med resort, which is considered an eyesore, and replacing it with a European-style cultural village including a 126-room hotel and up to 110 low-rise homes.

A public square and theatre facilities are also envisaged by the consortium, which is led by the Canadian-based group Quorum.

St. George's Mayor E. Michael Jones, who is keen to see the rejuvenation of the old Club Med site to breathe fresh life and vitality into the town, said: "I'm disappointed that they have not come to an agreement. I'm looking forward and I'm hopeful that there will be a property development up on the hill.

"The town has to look for every eventuality and we are working with the developer and the Government and hopefully some resolution can be made in the near future."

Mr. Jones added that, as the Government is the landlord controlling the site, it had the responsibility to seek the best outcome for the people of Bermuda as well as the residents of St. George's.

"I look forward with anticipation to what the Government brings to the table ? whatever opportunity they deem to be in our best interests," he said.

Mariea Caisey, a former deputy town mayor and current rival to Mr. Jones in the mayoral election on January 26, said: "The news is disheartening. I have not been involved in the negotiations. I just hope something can be done. It has been lying empty for so long and everyone has been upbeat about the plans.

"I hope that, whatever the problem is, they can get it back on track."