Manchester is threatening to take the Government to court over Gordon Brown's decision to scrap a supercasino promised to the city, it has emerged.
The complex would have housed a hotel, restaurants, bars, a nightclub, and an entertainment arena.
But, in one of his first high-profile decisions as prime minister this summer, Brown announced a u-turn on the proposals, leaving hospitality operators in limbo.
Legal advisers have now told the city council that it has strong grounds to seek a judicial review of the prime minister's U-turn over the gambling act, according to the Financial Times.
Sir Howard Bernstein, the council's chief executive, said: "We will look very carefully at how we protect our interests. I wouldn't rule out legal action."
Ministers discussed with the council whether it would accept one of the eight large casinos permitted by the new gambling act as a consolation prize for being denied the super-casino. But Bernstein said this would generate fewer than 500 jobs.
By Daniel Thomas