SPARE a thought for tiny Monaco, playground of the rich and famous. An ambitious plan to make it bigger by building an artificial peninsula over the sea has been scrapped by Prince Albert, the ruler, because of environmental concerns and the global financial crisis.

The decision to abandon the much vaunted £10 billion expansion scheme has disappointed inhabitants, prompting criticism of the 50-year-old bachelor prince renowned for his interest in green issues. There was anger also among developers who had been vying for the contract with the help of some of the world’s leading architects. They had spent millions preparing their bids and will not be reimbursed.

“This is a terrible blow for Monaco,” said a lawyer associated with a French construction group that had spent £5m on engineering studies. “Basically, it has all been a big waste of time and money. Albert has a lot of explaining to do.”

Resentment of Albert, the son of Grace Kelly, the Hollywood star, has been fuelled by his decision to set off on a four-week expedition to Antarctica instead of grappling with the financial crisis.

His subjects also grumble about his delay in settling down - and producing an heir - with Charlene Wittstock, the South African swimmer he has been dating for two years.

There was bafflement over his latest decision. Albert, who drives an electric car and has led an effort to reduce traffic in Monte Carlo, the ritzy unofficial capital, had expressed concerns about the project’s environmental impact but was an enthusiastic backer of “reclaiming” land from the sea as a way to increase prosperity.

His idea was to continue a process begun by Prince Rainier, his father, the “builder prince”. Land pressure in Monaco has resulted in some of the world’s most expensive real estate and Rainier had the idea of maximising profit and space with a promontory built on concrete embankments.

Rather than pouring concrete into the sea, Albert, sometimes known as the “green prince”, favoured construction on 50m-high pylons in the hope that this would not disturb marine life and local currents. When inviting bids for the contract in 2006, he insisted that the new buildings should use energy-saving technology and recycled water.

The plans envisaged an area of three-quarters of a square mile - about 8% of Monaco’s present territory - jutting out into the sea from below the famous Monte Carlo casino.

This new district, which was supposed to have been completed by 2015, would have been filled with luxury flats, shops and restaurants and named after Kelly, who was killed in a car crash on a hairpin bend above Monaco in 1982.

A merger of Hollywood star power and European royalty, her marriage to Rainier in 1956 helped to cement Monaco’s reputation as a glamorous centre of offshore finance. Subsequently Monaco developed a reputation, in the words of Somerset Maugham, as “a sunny place for shady people” and the volte-face on the expansion project triggered speculation about underhand dealings and squabbles among ministers and advisers.

The two finalists in the bid were the Monte Carlo Sea Land group, which had secured the services of Daniel Libeskind, the celebrated American architect, to dream up a system of internal canals; and the Monte Carlo Development Company in collaboration with Britain’s Lord Foster.

Whatever his reasons for jettisoning the project, Albert, who took over as ruler after the death of his father in 2005, finds it hard to satisfy his increasingly grumpy subjects.

The fight against corruption and money laundering appears to have gone nowhere: some of his father’s retainers who were removed from government after Albert’s accession have subsequently been reinstated, even though one of them was known to have built a private home at government expense.

The prince’s personal life, meanwhile, has raised eyebrows and fed a public obsession with the excesses of the centuries-old Grimaldi clan, particularly since he acknowledged the existence of two illegitimate children, an American girl and the son of a Togolese air stewardess.

Some of his friends wish Albert, who has been linked romantically with numerous models and actresses, had followed in his father’s footsteps by marrying a Hollywood celebrity to help to revive Monaco’s fading allure.

Others wish he would announce his engagement to Wittstock, 30, whom he first met at a swimming contest and who is being increasingly treated as Monaco’s “first lady”. Rumours have been flying, but the palace has denied that an announcement is imminent.

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