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London Eye in £2m-a-month debt

The AJ has learned that Marks Barfield's London Eye, on the South Bank of the River Thames, is accruing a crippling debt of almost £2 million a month, placing the future of the recent addition to the capital's skyline in jeopardy.

Despite attracting more than four million visitors last year, the London Eye Company - comprising co-owners British Airways (BA), the Tussauds Group and Marks Barfield - owes £130 million.

Construction of the Eye was financed primarily through a £40 million loan from BA, which also covered the Eye's massive over-run costs.

Debts are now mounting up as a result of the 25 per cent interest rate that BA levied against the company and, despite the annual £10 million profit, the situation shows no sign of improving.

Designers David Marks and Julia Barfield have publicly called for the Eye to be refinanced to prevent further financial disputes and to protect the future of the landmark.

The finance problems will come to a head tomorrow (Friday) at a crunch board meeting, where there will be crucial talks on reducing the debt.

A spokesperson for Marks Barfield said that the designers 'did not want to take control' of the refinancing, but would ensure that the initiative was moved up the agenda.

'This process has meant refinancing is David and Julia's priority, ' he added. 'BA has been helpful and is keen to cooperate.'

BA was unavailable for comment but a spokesperson for the Tussauds Group was keen to stipulate that 'the objectives of all shareholders are aligned', and that while the Eye is 'absolutely not at risk', the financing arrangement was 'certainly not ideal'.

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