Firoz Kassam's plans to save Oxford United could lead to taxpayers owning half the club's new stadium.

Oxford City Council is planning to set up a partnership with the London-based hotelier to ensure the Minchery Farm stadium is built.

The deal is likely to involve the city taking a share of up to 20 per cent in the stadium. In return, Mr Kassam would be allowed to build a hotel and leisure complex - including a multiplex cinema - on council-owned land next to the site.

The announcement came after Mr Kassam put forward initial proposals for completing the half-built football ground, which has been untouched for more than two years.

Council chiefs, who are still owed £900,000 from the sale of the land, say they want to increase their involvement in the project - and are seeking new ways to come to an agreement.

But they insist they will not give away council land free - and will demand that the stadium is completed before a leisure development gets the go-ahead.

Public consultation, possibly including a referendum, is planned before a final decision is made. John Arnold, city director of property and leisure, said: "We entered into an arrangement in good faith with the club but it has not been possible to see that through - therefore we have to be flexible if we want see the stadium to proceed.

"Mr Kassam has put a proposal to us to complete the stadium and develop a hotel and leisure complex on adjoining land.

"We would be prepared to enter into a contract subject to the stadium being completed. This could be a stadium part-owned by the city council."

The city council has been looking at the roles of local authorities in other football stadia across the country in a bid to decide the best course of action.

Mr Arnold highlighted the case of Huddersfield Town's McAlpine Stadium which was part-funded by the proceeds of selling council-owned land to developers.

However, Kirklees Metropolitan District Council, which owns 40 per cent of the stadium company, had to put £2m into the project - and has suffered a net loss.

Council leader John Tanner said: "We are anxious to get leisure facilities developed at Minchery Farm but there are still a lot of hurdles to jump.

"If this deal succeeds the people of Oxford will get a completed stadium and better leisure facilities - they will not lose money because the council does not have any money to put in.

"We are still going to get market value for the council land and we are still talking money with Mr Kassam."

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Story date: Wednesday 24 February

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