Jul. 31, 2003 -- Rescue talks to save top hotelier Le Meridien have been abandoned, leaving famous London hotels including The Waldorf and The Grosvenor House on the brink of financial collapse.

Bankers have been trying to thrash out a deal to pump new money into the ailing hotels operator, but last night the talks ended with no agreement, leaving insolvency the most likely outcome for the prestigious London hotels.

Le Meridien was bought by millionaire venture capitalist Guy Hands just days before the events of 9/11 savaged the global tourism and business travel industry.

He sold 11 of the UK hotels to Royal Bank of Scotland under an arrangement where the hotelier would rent back the properties and continue managing them. But with tourists and businessmen staying away from London, Le Meridien has struggled to make the rental payments.

Hands had teamed up with billionaire Saudi investor Prince al-Waleed bin Talal to inject a further UKpound 150 million into the business, but bank lenders last night rejected the offer, according to the Financial Times.

Now RBS may put the UK hotels into receivership and hand the management contracts to other hotel chains.

Meanwhile, Le Meridien's 126 hotels overseas look set to be taken over by the Lehman Brothers investment bank and Hyatt Hotels.

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(c) 2003, Evening Standard, London. Distributed by Knight Ridder/Tribune Business News. RBOS,