Firm behind meltdown in Dubai makes £2.2bn loss

Nakheel, the property development company at the heart of the Dubai debt crisis, made losses of 13.4 billion dirhams (£2.24 billion) in the first half of the year.

The figures highlighted the severe difficulties faced by the firm which owns the Palm Jumeirah - the huge palm-shaped island off the troubled emirate.

Nakheel is owned by Dubai World holding company which is in talks with creditors to delay repayment on its $3.5 billion (£2.1billion) of debts.

Nakheel's massive losses are a stark difference from the 2.65 billion dirhams profit it booked during the same period a year earlier. They were triggered by huge writedowns in the value of the properties and a sharp fall in revenues.

The figures were leaked to Bloomberg as bankers from RBS, Lloyds, HSBC and Standard Chartered continued negotiating over Dubai World's debts.

"The talks aim at finding a final solution and how to reschedule the debt due the matter at hand now is a date for the debt maturing this month," United Arab Emirates newspaper al-Bayan reported.