The government's spending watchdog, the National Audit Office, has confirmed it is looking into the proposed �125m sell-off of the Millennium Dome.

The NAO regularly produces reports on sales of major public assets but long term critics of the Dome will hope the "preliminary work" will turn into a full inquiry of the sale.

The man at the helm of Legacy Plc - the government's preferred bidder to buy the Dome - was at the centre of a row at the weekend after it emerged he had donated �33,000 to the Labour Party during the bidding process.

Party officials insisted that the money was simply the final part of a �100,000 donation Robert Bourne had pledged before the Dome was even built.

The minister responsible for the Dome also confirmed that Legacy will be allowed to pay for the site in installments.

Down payment

Dome Minister Lord Falconer rebuffed allegations of cronyism and insisted he wanted to ensure the sale was "value for money".

PY Gerbeau: Still interested in a bid

He said the Dome's �125m price tag was "not a knock-down price".

Legacy was likely to make a down-payment of �50m and settle the balance "over a period of years", Lord Falconer told Sky's Sunday with Adam Boulton programme.

Details of the deal are expected to be thrashed out by the middle of next month.

The contents of the Dome, including turnstiles, hi-tech lighting and sound equipment, will be auctioned between 27 February and 2 March in a sale that could yield up to �10m.

Legacy wants to turn the site at Greenwich, south-east London, into a high-tech business park.

Dismantling

However there have been some press reports that Legacy's bid may not be viable and Dome chief executive Pierre-Yves Gerbeau has said he is still interested in heading a bid to continue its use as a visitor attraction.

Lord Falconer said dismantling work taking place at the Dome was only to remove hired equipment, which would otherwise incur penalty fines running into millions of pounds.

The site would remain viable as an entertainment and exhibition arena until the sale was concluded, he said.

The Conservatives have called for the bidding process to be reopened.

The NAO has already made one report into the financial management of the Dome, which concluded that the attraction was risky and financially weak, before it opened.

A spokesman told BBC News Online that the current monitoring amounted to "a watching brief".

"We are doing preliminary work on the sale of the Dome with a view to possibly reporting to Parliament," he said.