Millionaire defers last payment on ?60m County Hall

The final payment for the controversial sale of County Hall in London still has not been made seven years after it was sold .

The controversial Japanese millionaire Takashi Shirayama - who bought a 999-year lease for a rock bottom £60m in 1992 - is pleading poverty, enabling him to defer the final payment of £10m.

Despite the place being a tourist attraction, complete with an aquarium, hotel, a McDonald's and an expensive Chinese restaurant overlooking the Thames, the company running the former headquarters of Greater London Council is claiming big losses.

Mr Shirayama was expected to start paying off the final instalment three years ago, but the authorities responsible for claiming back the cash say he has declared big losses every year. That means he need not pay back a penny under a deal negotiated by the Tories in 1992. The latest losses are said to be in the region of £7m.

Supervision of the payments has been left to Michael Pitt, the assistant treasurer at the London borough of Bromley. He was given the job after the London residuary body, which was set up to sell off the old GLC's assets, was wound up before Mr Shirayama was due to make the final payment.

Mr Pitt said yesterday: "None of the money has been repaid because under the deal Mr Shirayama does not have to pay us until he makes a profit and his private company has so far declared losses every year. Even when he does make a profit he only has to pay a share of the profits towards the final payment. "

The deal was originally approved by Michael Howard when he was environment secretary, and was severely criticised four years ago by the all-party Commons public accounts committee.

They condemned confidentiality clauses put into the sale and a deal that means Mr Shirayama could continue to declare losses until 2012 without having to repay the cash. The deal also ensured that no interest payments would be made on the deferred payments - thereby reducing its real value every year.

The report warned in 1995: "At the time the sale was completed this deferred payment was worth only £2.9m if paid in 2012, or £7.9m if the proposed hotel and related business activities made a profit of £20m in 1996. Such arrangements create an incentive for the purchaser to delay payment of the original sum."

The MPs' report also criticised the residuary body for not getting an independent valuation in 1992 and relying on a five-year-old assessment of the building when completing the deal.

They are also critical of its failure to get bank guarantees from Mr Shirayama and for allowing him to dictate terms and get a 20-year deferment on the final payment.

Mr Shirayama has already recouped £30m of the purchase price selling a 75-year lease on the building to the Whitbread group to open two hotels.

No figures have been issued showing how much McDonald's is paying for its site nor for the deal involving the opening of the Chinese restaurant.

Mr Pitt said he could not release the figures because of the confidentiality agreement. He did disclose that Mr Shirayama's company had claimed large sums against any profit for the restoration work on County Hall.

The money - when it is eventually paid back - would be distributed to all London's 32 boroughs so they can spend it on public projects. The government is having to build a new chamber for the new Greater London authority near London Bridge. Elections for a new mayor and council take place next year.