THE once-preferred developer for Alexandra Palace is taking legal action against the council.

The manager of the Charitable Trust, responsible for the landmark building, confirmed written confirmation outlining Firoka's intentions to sue had been received.

David Loudfoot said: "Our legal advisers are considering the letter and will be responding in detail."

He refused to comment on the amount of the claim for loss of earnings.

Millionaire Firoz Kassam, who owns Firoka, won a bid to turn Alexandra Palace into a leisure complex, equipped with casino and hotel, in November 2006.

But a High Court battle last October 2007 ended in a lease being quashed Firoka's after it was found the consultation preceding it was flawed.

The trust gave Firoka a free pass to continue trading at the palace — under the assumption a new lease would soon be signed.

But when Mr Kassam started to appear disinterested in the deal, he was issued with an ultimatum to confirm his commitment in writing.

It did not materialise and his company was asked to leave the palace at the start of last year.

Since then, the historical building, has been managed by the trust.

Mr Loudfoot added: "Since dealings with Firoka ceased we have worked closely with the council to re-establish our trading company and start looking forward, with improved facilities, new contracts and an exciting programme of events.

"This action concerns events in the past, and does not impact on our current and future plans."