it.

Chelston, which stands in a 14-acre estate off up-market Grape Bay Drive in Paget, will be put on the market as part of a US Government drive to cut costs.

And the news could be interpreted as a slap in the face to the people of Bermuda by the Clinton administration.

Consul General Robert Farmer confirmed: "An order has been signed by the State Department requesting that Chelston be sold.'' He added: "It's very sad -- if you counted the economic factors against the importance of Chelston with respect to Bermuda -- yes, I'm disappointed at the decision.

"But obviously all expenditure has to be examined periodically in terms of cost and benefit.

"People in Washington came to the conclusion that it was unnecessary to maintain such a large and lovely estate as Chelston.'' Mr. Farmer added that he had already briefed Premier Pamela Gordon on the State Department decision.

Ms Gordon said last night: "We are very much against the sale of Chelston -- however, we will keep an open mind.'' And she pointed that the purchase of a suitable new property, given rules governing foreign ownership of houses in Bermuda, would be enormous and probably not much off the estimated value of Chelston.

Ms Gordon said: "I'm not sure that those who have instructed the sale are aware of the regulations in Bermuda.'' She added Bermuda had been "considerably downgraded'' by the US in terms of physical presence.

But Ms Gordon said: "Where it still matters -- for example, Customs pre-clearance -- the US still seems to be a friend to Bermuda.'' She added: "You have to be careful of the message which is being sent -- more and more we see a dimunition in the US's physical presence.

"But unless additional things like pre-clearance are threatened, this is really an internal problem for the US.'' And she said: "We cannot stymie the US government more than we could any other person wishing to sell -- but the Bermuda Government has the right of approval or disapproval. And that won't change because it's the US Government.'' Chelston sale The news means Mr. Farmer, set to stand down next month, may be the last US Consul to live in Chelston, home to the Island's US representatives since the 1960s.

It is understood the US government will want to sell the estate as fast as possible.

A new, more modest house is likely to be sought for Mr. Farmer's successor, wealthy businessman Vin Gupta.

It is believed Mr. Gupta, an executive with American Business Information in Nebraska, will regard the Consul General's job as part-time and not base himself permanently in Bermuda.

Mr. Farmer -- appointed for three years -- officially finished his term of office in August, but was asked to stay on until Mr. Gupta arrives.

The future of the massive official home has been in doubt for more than a year, following a US General Accounting Office report on America's overseas properties.

Chelston was estimated in 1996 to be worth at least $12 million to the US Government, plus savings of around $100,000 a year in maintenance costs.

But it is believed the house, and particularly the 14 acres of prime real estate attached, would command much more, especially from developers.

But plans to build in the grounds would almost certainly be knocked back by Government.