Armier Developments Ltd has written to its members saying that Joseph Muscat has confirmed an agreement originally reached in 2002 with Labour MP Joe Mizzi.

The same agreement had also been reached with the PN, a spokesman for the company, Tarcisio Barbara, told timesofmalta.com. He complained, however that the government had not respected the agreement, and Mepa had requested a change of plans three times.

The company said that in terms of the agreement, it would handle a project for the building of beach rooms to replace old boat houses, while offering a number of rooms for new users.  Existing users will have a right of first refusal.

The project is expected to feature some 1,000 rooms for use during the summer only.

In a statement this afternoon the government has denied allegations being made in a letter which it said Armier Developments Ltd was distributing.

"The facts are that the government wants to address this issue so it is preparing several proposals to be discussed with those involved.

"No proposal has reached the level desired by the government so far so all were refused and none were discussed with the association or with those involved."

The government said that it had to observe its commitments about the boathouses so a decision had to be taken following discussions with all involved for a fair solution.

In January, Prime Minister Lawrence Gonzi said a  Nationalist government was  committed to finding a solution to the Armier boathouses problem in the next legislature, and it would legislate on the issue if necessary. Dr Gonzi said a PN government “will respect and honour its commitments”.