PLANS to build a £150m casino in the North-East will not go ahead unless tax laws are changed, a company has said.

US gaming company MGM Mirage has bought land next to Newcastle United Football Club's home, St James's Park, in a £5m deal.

But bosses at the US company want the Government to reduce the 40 per cent tax levied on casino profits before it creates a casino.

MGM said this condition must be met before it will press ahead with the partnership with NUFC.

Lloyd Nathan, the managing director of MGM Mirage Development Europe, said: "The current tax rate would be prohibitive to this type of large-scale development.

"It is hard to say what the right tax rate should be in isolation, because it is part of a number of other issues, such as the shape and detail of deregulation.

"But I can say it is too high at the moment."

The project, which will create 2,000 jobs, also needs planning permission for a hotel and casino complex.

Mr Nathan is in talks with the Treasury and the Department of Culture, Media and Sport, which regulates gaming.

Culture Secretary Tessa Jowell said the reforms to gambling laws are likely to be backed by the Government.