The bombshell was dropped to staff during talks with property developers.

But employees were also given a glimpse of a bright future should a potential partner finance the multi-million dollar scheme.

Bermuda Properties Ltd. general manager Peter Parker yesterday confirmed that meetings had been held with Marriott Castle Harbour Resort management, shop stewards and staff to address concerns.

The Hamilton Parish hotel has attracted media attention while BPL has fought to secure planning permission to develop the property and a financial partner.

Meanwhile, media reports have sparked worries among some 400 people employed at the resort.

"We thought, `Let's nip this in the bud and tell them what is going on on a regular basis','' said Mr. Parker.

BPL president Ed Trippe was present for the meetings and he told employees that building could start at the site in about eight months -- provided certain conditions laid down by the financial partner were met. Last week Environmental Minister Harry Soares turned down an appeal by environmental groups and granted BPL planning permission for 13 houses with swimming pools, 13 two-storey town houses, a communal pool, four tennis courts and a water tank at Ship's Hill.

But Mr. Parker stressed: "Ship's Hill is about the resort.'' He added: "The Ship's Hill decision is just a piece of the big puzzle.

Without the whole puzzle in place, we cannot start on just one part of it.'' Meanwhile, BPL have pumped about $250,000 into design, engineering and architectural plans for the hotel which is more than 50 years old.

Mr. Parker said: "The plan is to take a hotel built in the 1930s and make it a product which is competitive and a product that Bermuda can be proud of going forward.'' He revealed that the hotel would remain the same size physically but have fewer rooms.

But, while noting the rooms would be at least 30 percent bigger, he was unable to disclose the proposed number as it had not been finalised.

"They will be very, very up market. Every room will have a balcony and a French door.'' Other possible plans the developers are looking at include bulldozing the old ballroom, restoring the western garden courtyard to its former glory and moving the reception to a more pleasant location.

The courtyard, in particular, used to be one of the grandest places in Bermuda, said Mr. Parker.

"The rooms looking out over it were the most wanted in the hotel and now those rooms look out on an unattractive roof and are the worst rooms in the hotel.

"By restoring the garden courtyard we will be able to restore value to those rooms.'' Mr. Parker said he could not say too much about the plans because they were still in the design process.

He did reveal that the hotel would close for about 15 to 18 months while renovations were carried out although the hotel would be kept open as long as possible.

He also disclosed that there was an immediate need for a new sewage treatment plant.

In February, a leaking sewage pipe contaminated water in the Marriott's water tank and a number of guests become seriously ill.

The Health Department will not allow the hotel to operate if it does not put in a new sewage treatment plant at the hotel, said Mr. Parker.

But the work requires capital and staff have been warned of this.

"Without the financial partner, none of this will get done,'' said Mr.

Parker.

"The work requires massive amounts of capital which Bermuda Properties just does not have.'' Investment firm Donaldson Lufkin Jenrette have signed a letter of intent with BPL but will not hand over the capital until certain conditions are met.

These include the approval of the Ship's Hill development and the approval of BPL's Private Members Bill entitled the Castle Harbour Redevelopment Act 1998.

A report on the bill -- which will lift restrictions in BPL's incorporating Act that require changes to golf course lands at the Castle Harbour Resort site to be passed by both Houses of Parliament -- has been tabled in the House of Assembly and is set to be discussed today.

Marriott facing possible closure DLJ sees the requirement of having to go through both Houses of Parliament as being unnecessarily restrictive, he added.

"They don't want to have to go to Parliament every time we want to do something at the resort.'' "We told staff that the essential point about the private bill is that BPL is not asking for special treatment,'' said Mr. Parker.

"We just want to be treated like every other hotel on the Island. Why should we have another bureaucratic hoop to jump through?'' Employees are concerned about their futures should the bill not pass.

"What happens if we don't get the private bill?'' asked Mr. Parker.

"I don't know. DLJ have told us that if we don't get it, they will withdraw but we are negotiating with them.

"To follow on, what happens if they withdraw? Well, as an example, I guess we'll close the hotel. The private bill will not trigger this, DLJ's withdrawal will trigger it. If they leave us then we don't have the financial resources to make the improvements. Without financial backing, I believe we will have to close down. We can't continue.''