Lord Rogers complained over unpaid fees

Lord Rogers' company, the Richard Rogers Partnership (RRP), was sacked from the project in July 2001 because of concerns over escalating costs.

But Lord Rogers brought an action against the assembly, saying it owed his company in unpaid fees.

Finance Minister Edwina Hart told AMs Lord Rogers had claimed �530,000, but the figure was reduced by an adjudicator.

Ms Hart admitted the matter was embarassing, but insisted the decision to sack him was right.

Ms Hart told the assembly that Lord Rogers had "significantly underestimated the cost of the building".

"He was not found to be negligent," she added.

"Although he effectively got it wrong, the assembly is not due any damages or repayment of fees."

Finance Minister Edwina Hart

The assembly also claimed it had been misled over the terms of the contract, and had incurred serious costs as a result.

Although the judgement in the case accepted Lord Rogers had underestimated the costs, it felt this was not enough for the assembly to withhold fees.

In her statement, Ms Hart also said she was making a statement about the settlement after details were leaked to the press.

She hoped the matter was now closed, and that "the right professionals" would now take over the project.

Ms Hart also commented that such settlements were "quite normal in the construction industry."

'Major embarrassment'

Normal or not, the news is the latest development in a story which has unfolded over the last four years.

In 1998, RRP had agreed to build the Cardiff Bay debating chamber for �27m but costs subsequently rose to an estimated �37m to �41m.

The saga has been labelled a "major embarrassment" by former Welsh Secretary Ron Davies and Plaid Cymru leader Ieuan Wyn Jones.

Former Welsh Secretary Ron Davies

Mr Jones also criticised the leadership of First Minister Rhodri Morgan on the issue.

The project has now been put out to tender, and Lord Rogers has teamed up with a construction group in a bid to win back the contract.

The RRP's design now has the backing of the housing, property and construction firm Taylor Woodrow.

Lord Rogers has now pledged to build the new chamber for �13m.

The man behind the Pompidou Centre in Paris and the ill-fated Millennium Dome in London has said the assembly HQ was "one of the best buildings we have ever designed".

But there have been calls for the chamber project to be scrapped and the money to be spent on a new children's hospital instead.

Completion of the building is now scheduled for the second quarter of 2004.