AEG Live, the company that persuaded Michael Jackson to sign up for 50 nights at the O2 arena, is facing a liability of up to £300 million and a dark house for the next nine months.

It was Randy Phillips, head of the US entertainment company that turned the derelict former Dome into the UK’s most popular new arena, who persuaded Jackson to return for a stunning series of “farewell” concerts, beginning next month.

The announcement, fuelled by a rare public appearance by Jackson at the venue, sparked an online frenzy, some 360,000 registering applications before sales had even opened. Within hours, one million fans had attempted to snap up tickets for an initial run of ten concerts, which rapidly turned into 50.

Tickets were immediately placed on the secondary ticket market for up to £1,000. But Jackson’s last reported public announcement on his residency at the O2 suggests that a combination of managers, advisers, concert promoters and those seeking to recover his debts, had let events spiral out of the singer’s control. “I don’t know how I’m going to do 50 shows,” he said. “I’m really angry.”

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Amid scepticism over whether the frail singer could complete the residency, especially among insurance companies, AEG Live said that it was prepared to “self-insure” the shows.

Reinsurance magazine, which found that there was low demand in the London insurance market for the policy to cover all dates promoted by AEG Live, placed the liability at about £300 million.

The first ten concerts are believed to have been placed on the London insurance market at a value of £80 million. Phillips had assured insurance brokers that doctors had spent five hours with Jackson, taking blood tests. “He’s a vegetarian, he’s in great shape,” Phillips said. “The insurance cover, we are working on that now.”

But rather than lowering expectations for the shows, AEG pumped out reports that Jackson would present the most spectacular live show seen on an indoor stage.

Only this week, Jackson’s PR machine announced that “extra tickets” would be available for the shows, due to begin on July 13, and revealed that Jackson’s stage costumes would be studded with 300,000 Swarovski crystals. Rumours were stoked that Jackson was preparing a stage move to succeed his famous “moonwalk”. “I would trade my body for his tomorrow,” said Phillips, amid reports, furiously denied by Jackson’s advisers, that the singer was suffering from skin cancer.

Even at midnight, after Jackson’s death was confirmed, the O2 website was still advertising the This Is It tour, and directing fans towards a Jackson website, headlined “The time has come” and promising fans their final audience with the King of Pop.

The death has significant implications for Seatwave, the company that traded in about 10,000 Jackson tickets on the secondary market often for a price far above face value.

The company placed a message on its website saying: “We at Seatwave are saddened by Michael Jackson’s death. Our condolences go to his family and we appreciate the great legacy he has left us.”

AEG Live’s website said that fans who could not make the dates rescheduled after the opening dates had been cancelled would get a full refund. That promise will now be honoured for one million customers.

Ticketmaster, which also sold Jackson tickets, has a policy to refund the face value of the ticket, plus the booking fee.

AEG Live is a subsidiary company of the Anschutz Entertainment Group, a sporting and music entertainment company. The company owns venues including the Staples Center in Los Angeles.

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