• In-house council report recommends go-ahead for compulsory purchase order • Land may be sold to Renewal, which was set up by previous Lewisham mayor

The saga of Millwall, the mayor and the mystery developer is about to reach a decisive point of crisis. A final decision on the compulsory purchase of Millwall’s land is due on Thursday night in the municipal splendour of Lewisham council’s civic suite.

Already the club’s hopes have received a bitter blow with the publication of an in-house council report recommending the Labour cabinet forces though the order. The land would then be sold on to an offshore-registered company called Renewal, a move that could see Millwall FC threatened ultimately with a gentrification-led exit from their own backyard.

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Renewal’s ownership remains unknown, although in an arresting coincidence, company documents show it was originally set up by none other than the previous Labour mayor, Dave Sullivan. Sullivan is a former Lewisham council colleague of the current mayor Sir Steve Bullock and of the current chief executive Barry Quirk, best known locally for earning more pro-rata than the prime minister for working a three-day week with the council.

Among those who might take the chance to speak at the hearing is Zampa Fish, a cod wholesaler whose business is now threatened with closure but which is, according to Millwall ’s supporters, still unlikely to be the fishiest thing in the room.

It is a bewildering state of affairs generally, not just for football but also for anyone concerned by the opacity of local government. Already there are fears the compulsory purchase order may open the door to other football clubs being forced out of their homes by rising land prices and local authorities with an eye on the benefits of “regeneration”.

At Millwall’s annual general meeting last Friday the owner, John Berylson, spoke of the black cloud over the club’s future. “Our landlord will be Renewal, an offshore company domiciled in tax havens with anonymous directors and no experience whatsoever, as it admits, of completing a scheme of his complexity,” he said. “I am sure that you will all appreciate just how serious this is and what a threat it represents to the future of the club.”

The question of who owns the developer has been a point of speculation throughout. In an attempt to peel back the veil, the Millwall AMS supporters group has now engaged a forensic financial investigator to look into Renewal’s history and provenance. According to Millwall AMS’s Mickey Simpson, the investigator is a financial professional giving his expertise in this area for no fee in the interest of transparency. His findings, seen by the Guardian, demonstrate beyond any doubt the unbroken ownership link between the former mayor and the opaque British Virgin Islands company that owns half of Renewal.

There is, by definition, no hard evidence here the former mayor or any of his associates have a current involvement with the developer, which has chosen corporate anonymity. But such is the historic connection that the head of Lewisham’s own scrutiny-committee, councillor Alan Hall, has already called on the council to formally deny Sullivan is involved in the scheme. To date Hall has received no response to his suggestion.

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Sullivan himself remains a fascinating minor player in the history of UK local politics. Often described as “colourful”, the former mayor was engaged in the outsourcing of local government services in the 1990s, and was so enamoured of New Labour’s prime minister he even gave his son the middle name “Blair”.

For more than a decade Sullivan was also a director of Millwall, an arrangement that came out of the council’s sponsorship of the club. After leaving politics in 2002 he set up Renewal and began buying up plots of land in Bermondsey. The Millwall AMS investigation shows that in 2005 Renewal’s ultimate share ownership was split between Sullivan’s personal 24% and a company called Independent Advisors Incorporated, registered in the British Virgin Islands, which is still Renewal’s part-owner.

A year later Sullivan was asked to leave the Millwall board when the extent of his property interests around The Den became clear. Three years later, the AMS investigation shows, Independent Advisors Limited became Renewal’s 100% owner as Sullivan transferred his shares behind a veil of offshore secrecy. When the Guardian asked Sullivan if he was still a part-owner of Renewal in September he said he was no longer involved. Asked if he had sold his shares, he said: “Yes, I must have sold them.”

At the hearing on Thursday Lewisham intends to state that the identity of Renewal’s owners is irrelevant to the case. It is a startling position for a Labour council to back itself into. The mystery developer stands to benefit from public powers and public money, while evicting Lewisham council residents from their homes and undermining the area’s outstanding community asset of the past hundred years.

The council also intends to address the sales brochure, revealed in the Guardian in September, that suggests Renewal’s Isle of Man-based owner has already been looking into selling its interest, throwing the council’s plans into turmoil.

The pre-hearing report contains a bizarre attempt to dismiss the brochure, which was prepared by the estate agent Lambert Smith Hampton. The council accepts Renewal’s part-owner had engaged the estate agent, which then produced the sale document.

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Without the backing of evidence, the council then insists Renewal itself was “unaware” this had happened. As a member of the council’s own scrutiny committee, councillor John Paschoud, has already told the East London Lines website: “I find the explanations that nobody knew anything about it a little hard to swallow.”

The report, which is already a source of embarrassment to some Labour backbenchers, also refuses to reveal the identity of the mystery developer because it fears it would “result in a breach of data-protection legislation”.

Where to go from here? So far Lewisham council has framed this as a battle between two private profit-making interests, disregarding Millwall’s own historic role and indissoluble ties to its community. Nobody involved disputes the need to redevelop and build new homes, but there is plenty that stands to fall between the cracks.

Millwall’s community trust currently occupies the land threatened with seizure. For the past 25 years it has worked with local people, mainly children, the elderly, and the disadvantaged, saving Lewisham council an estimated £7m a year in care and services. Those involved are already starting to feel the strain, just as local residents have suffered anxiety and health problems at the heavy-handed tactics of the developer, which have included erecting large signs urging them to sell.

Should the council confirm its order, an appeal to the high court is likely. Transparent cooperation between club, council and developer would be a better outcome for all concerned. For now all parties will look to Thursday’s hearing and a land grab that will cast its own minor shadow over football league clubs everywhere.