Parliament is on the verge of rejecting Labour’s decision to build the first supercasino in Manchester.

The Daily Mail has learned that Culture Secretary Tessa Jowell and Sports Minister Richard Caborn have both privately suggested that they could look again at the decision to avoid a humiliating revolt.

A growing body of MPs and peers believe that Blackpool should have been awarded the licence by the independent Casino Advisory Panel.

Miss Jowell has said that the decision must be approved by votes in both Houses of Parliament. But angry peers last week used a private meeting to tell her the Government will lose heavily in the Lords.

In addition, more than 100 MPs – 65 of them Labour – have signed a Commons motion backing Blackpool’s bid.

That opens up the possibility that Labour rebels could overturn the Government’s majority of 65 in the Commons.

It was reported yesterday that Miss Jowell told the Joint Committee, which drew up the original legislation for a supercasino, that she is ‚considering the arguments for appointing an ad hoc committee of MPs‘ to look again at the issue.

But the Government’s position was mired in confusion last night as the Department of Culture continued to insist it is ’strongly minded‘ to support Manchester.

The chaos is a blow to controversial South African tycoon Sol Kerzner, whose company is in pole position to secure the right to operate any Manchester supercasino.

Mr Kerzner became known in Britain as a result of his close relationship with Philip Anschutz, the Dome boss who entertained John Prescott at his American ranch.

He has been accused of bribery in South Africa, although charges were later dropped.

Officials from his firm have held at least 12 meetings with different ministers and Mr Kerzner hedged his bets by bidding for several of the supercasino sites.

By contrast, Blackpool has never picked a preferred bidder for its proposed supercasino complex, and Mr Kerzner’s firm is not listed among the 22 companies interested in operating the site.

When the Casino Advisory Panel chose Manchester, it claimed it would be the best place to test whether a supercasino would fuel problem gambling.

But addiction experts fear that locating a supercasino in the middle of a poverty- stricken residential area in the east of the city would lure the poor and problem gamblers.

Gordon Marsden, the MP for Blackpool South, who attended the meeting with Miss Jowell, said: ‚There needs to be a second look at this very perverse decision by the panel. We left her in no doubt as to the strength of feelings over the decision. There is everything still left to play for.‘

Another attendee said: ‚We let her know that we were unanimous in being shocked and surprised by the Manchester decision. If we had drawn up a list of things that would make an unsuitable venue, Manchester would have been at the top.

‚We told her in very clear terms there are very long odds against it getting through the House of Lords.‘

Miss Jowell is due to put the Casino Advisory Panel’s recommendations before Parliament next month. The Lords have unlimited powers to block the order and their views cannot be overruled by the Government, giving Miss Jowell very little wriggle room.

A spokesman for the Department of Culture, Media and Sport said: ‚Miss Jowell said she would see if there were additional opportunities to discuss the panel’s work in

Parliament. She believes the panel acted with rigour and remains minded to follow its recommendation of Manchester.‘

But insiders said that if the Joint Committee looked again at the supercasino bid, they might call for the criteria to be changed so the best regeneration bid – perceived to be Blackpool – is accepted.

John Whittingdale, the Tory chairman of the culture select committee, said: ‚This whole process has been dogged by disaster. In my view Blackpool always has been clear favourite. I was surprised by the outcome of the panel. Manchester is the location that will most likely lead to problem gambling.‘

Liberal Democrat peer Lord Oakeshott added: ‚A Manchester monster casino is still miles from the winning post. It faces a searching steward’s inquiry and probable disqualification in the Lords.‘