By Mark Rowe

 John Prescott is facing one of the most crucial decisions of his career over
 plans for an Olympic stadium which could expose the entire green belt of
 south-east England to property development.

 Earlier this year Mr Prescott, Secretary of State for Environment,
 Transport and the Regions, rejected an application from the local football
 club to develop a small stadium on the Copthall site in the north London
 borough of Barnet, which borders Hertfordshire, on the grounds that the
 land is classified as green belt.

 Despite the rejection of the original stadium, documents leaked to the
 Independent on Sunday show that the Government Office for London (GOL),
 a regional government department responsible for co-ordinating the capital's
 affairs, has drawn up plans for an Olympic aquatic stadium and training
 centres for swimmers on the site.

 The GOL operates within the Department of the Environment, Transport and
 the Regions (DETR) and is answerable to Mr Prescott.

 Building an Olympic stadium would intensify pressure in the South-east, one
 of the key areas targeted to supply some of the 4.5 million new homes
 needed across the UK by 2015.

 Opponents argue that should the new stadium, which would form part of the
 Government's bid for the 2008 or 2012 Olympic Games, get approval, it
 would create a precedent, making it easier for developers to overturn
 planning decisions that go against them, citing Copthall as an example.

 Mr Prescott turned down the original proposal from Barnet FC on the advice
 of his officials in the GOL.

 Third-division Barnet were required to upgrade their ground or move to a
 new site in the wake of the Taylor report into football stadiums after the
 Hillsborough disaster of 1989. They planned to relocate to Copthall and
 redevelop an existing 9,999-seater athletics stadium into a multi-sports
 complex.

 The club received permission from the local authority but a public inquiry
 was called after residents of the well-heeled London suburb of Mill Hill
 objected. The scheme was then rejected on the grounds that it would
 adversely affect the green belt on which the stadium is built and cause
 traffic congestion, even though the site is framed by the A1, the M1 and the
 A41, three major thoroughfares.

 "This is staggering hypocrisy," said Michael Edwards, chairman of a
 campaign by the club's supporters to overturn the decision to block the
 club's move to Copthall. "The Government wants to dress up Copthall for the
 Olympics bid and it's prepared to ride roughshod over the rules which we've
 followed. How could they make a fair decision on our case when they were
 already drawing up plans for an even bigger stadium? Our plans for a
 10,000-seater complex were unsuitable but a 15,000-seater stadium is fine.

 "The club did everything by the book, spent £500,000 on its application and
 has been in limbo for three years. Now it turns out we were never going to
 get permission anyway."

 A spokesman for the DETR said that no formal application had yet been
 received for a new stadium at Copthall. "If an application is received it will
 be dealt with on its merits," he said.

 "The football club's plan for Copthall was rejected for no other reason than
 that it would have infringed green belt and raised transport campaigns.
 There was no conspiracy."

 But the move has alarmed green belt campaigners in Stevenage, 25 miles
 further up the A1, where there are plans for 10,000 new homes. An
 enhanced stadium at Copthall would create a dangerous precedent,
 according to John Davies, who has been involved in opposing the housing
 plans in Stevenage and elsewhere in rural Hertfordshire.

 "The green belt really is a wedge that gets tighter and tighter as the A1 and
 M1 head towards London," he said.

 "This area has been vigorously protected and we look to central government
 to continue doing that. The general idea of a new stadium in the area is a
 thoroughly bad one. When an application for a smaller stadium has been
 rejected a plan for an even larger one just seems perverse."