Government already seems to be backtracking on plans to turn Morgan's Point into Bermuda's fourth main residential hub.

Only last month Works and Engineering Minister Terry Lister said the former US Naval Base would be developed into a "small town".

But Government's Department of Communication and Information has now issued a statement which appears to shy away from the plan.

"Last month, in a statement, the Hon. Terry Lister presented an option that Morgan's Point could become another small town...," read the Press release issued on Monday.

"The Minister wishes to emphasise that this is but one of many options to be considered for Morgan's Point.

"He further emphasises that the Government does not intend to move on any option regarding Morgan's Point until it has considered all viable options.

"To this end, Minister Lister has asked the Department of Planning to prepare a number of options that he can present to Cabinet for its consideration and ultimate decision.

"Minister Lister clarified that at this point in time no options have been discarded, and all reasonable options must be considered."

The former Naval Annex at Southampton has been empty since 1995 when the US pulled out but Bermuda Land Development Corporation has failed to sign up a developer.

One sticking point has been who was responsible for removing raw sewage and thousands of gallons of oil in underground caves.

Last month Mr. Lister had said forward planning would decide on how many houses would be built but waterfront properties would be incorporated on the 250 acre site.

Developers have been hoping to transform the contaminated base into an up-market marina, golf, leisure and housing complex, but the latest bid collapsed last summer.