when the government announced it had withdrawn the special dispensation awarded to the project back in 2006, apparently due to squabbles over real estate. Plans to build the resort, expected to eventually cost in the region of 100 million euros and which would create more than a thousand permanent jobs, are now on hold, though a representative of the current Manchester City boss is confident the complex will still be built.

Lagos City Hall was this week informed by the Agency for Foreign Investment and Trade that the so-called ‘Eriksson Project' had lost its status as Project of Potential National Interest (PIN). This status is only granted in special circumstances, where planning laws present obstacles in the conclusion of a project considered to be of national interest.

José Viegas, a promoter of the project, explained that the loss of the PIN status was largely due to the inability to agree terms with landowners, despite them having reportedly signed a promissory contract for the sale of the land required to build the resort.

He added that the consortium led by the Swede, who owns a home in Lisbon dating back to the days he managed Benfica, was now looking to buy land elsewhere, stressing that they were keen on remaining in Lagos should they continue to receive the support of the local council.

The resort was to have been built in the area of Corte do Bispo, Bensafrim and to consist of three hotels, a mini stadium with a capacity for eight thousand spectators, six football pitches, a spa, golf course, a residential area, tennis courts and a horse-riding centre.

Real estate developers had indicated work on the complex would start this year and be complete by 2010.

Back in 2006, José Viegas told The Portugal News that they had initially looked to build the complex in Lagoa, hence the group's name, ‘Lagoa Beach Resort'.

But the inability to find suitable land led the group to change their focus to Lagos.

At the time, the company admitted it had contacted Portuguese footballer Luís Figo to join in the development as he owns land adjacent to where the intended complex is to be built, but he denied their request, apparently "As he wants to build a housing development".

The Portugal News