Leading City PFI backers have thrown out a proposed agreement with the government for the private sector to keep 70% of gains made by refinancing the early PFI projects.
One said that leading banks had rejected a draft of the deal, which would have a covered 142 projects signed before September 2001.

The backer said: “The deal is unacceptable. We are not prepared to take all the risk, then have to pay back the gains to the government. The draft has gone back to the government.”

Whitehall has been pressing for a refinancing deal to be struck on early PFIs after criticism levelled by the National Audit Office on gains made by the private sector on the Fazakerley prison in Liverpool.

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