GORDON BROWN faces a legal challenge from Manchester over his decision to scrap plans for a supercasino.

Ministers will this week confirm that neither Manchester nor Blackpool will be allowed to open a Las Vegas-style gambling resort.

In an attempt to soften the blow, “sweeteners” worth hundreds of millions of pounds will be offered to both areas.

However, sources in Manchester, the city that won the supercasino contest a year ago, said the local authority would press ahead with legal action to recover the £250m of investment it claims to have lost because of Brown’s U-turn.

The court battle will be an unwelcome distraction for the prime minister who had hoped Tuesday’s announcements would finally put an end to the supercasino debate.

The government will still give the go-ahead to 16 new casinos. Eight “large” casinos, with 150 slot machines offering £4,000 jackpots, are planned for Leeds, Hull, Middlesbrough, Milton Keynes, Great Yarmouth, Solihull, Southampton and Newham, east London. Eight smaller casinos with 80 machines, also offering £4,000 prizes, will be in Stranraer, Skegness, Bath, Luton, Swansea, Torbay, Wolverhampton and Scarborough.

Britain has about 140 casinos allowed to offer the maximum jackpot, though the number of slot machines in each is capped at 20.

The supercasino row could jeopardise Labour marginal seats in the northwest, where sitting MPs will face strong challenges.

Hazel Blears, the communities secretary, whose seat is in Salford, has drawn up a series of measures designed to regenerate the deprived east side of Manchester.

They include bringing forward the construction of a tram service, the creation of a medical research department for the university and the relocation of several quangos.

However, the city’s political leadership was yesterday unimpressed.“The casino would have brought over 3,000 jobs at no public expense. The things that Blears is going to announce probably would have happened anyway and they will create at best a few hundred jobs,” said a senior council source.

Council officials last week held meetings with John Howell, the QC hired to advise on the legal challenge. He is known as the “assassin” because of his success rate. Sir Howard Bernstein, chief executive of Manchester council, said: “We will review the announcement if and when it is made and consider our position.”

Blears will also announce a regeneration plan for Blackpool, runner-up in the contest.

An extra £934m of taxpayers’ money is to be spent on modernising the illuminations, restoring the tram network and expanding further and higher education.

The Lancashire town also plans to bid for Unesco World Heritage status.

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