Covent Garden on market in Government fire sale

The QEII Conference Centre in Westminster, Covent Garden Market and miles of canal-side property will all be up for sale to the highest bidder.

Privatisations of the Tote, the Met Office, the Royal Mint and Ordnance Survey are also back on the agenda as the Treasury moves to repay the massive borrowing unleashed in the pre-Budget report.

The prospect of new asset sales came as it emerged that the Government's £37 billion programme of spending cuts could hit Labour's pledges on childcare, slash police budgets and scrap £3 billion of NHS hospital projects.

Despite fears that selling assets now would cost taxpayers billions because of the state of the property market, London's state-owned buildings and business interests will form the central focus of the firesale.

One of the juiciest plums in the portfolio is British Waterways Board's land and assets - worth up to £500 million. The board, which runs the nation's canals, has lucrative sites in Paddington Basin and other key locations.

The QEII Conference Centre, a modernist building near Parliament Square, has an annual turnover of £11million and makes a £2 million profit.

Gerry Grimstone, the former Treasury chief chosen to lead the sell-off, will reveal next spring exactly how much he expects to raise.

Some assets will be subject to outright sale, while others will be told to exploit commercial opportunties more effectively.

Also buried in the PBR documents are proposals to scrap £3 billion in NHS hospital extensions and to privatise prison building.