Mandelson called in to help recoup £400m Dubai debt

The Association for Consulting and Engineering (ACE) said some members have been offered just 65 cents on the dollar on unpaid fees by the emirate's best-known developer, Nakheel.

Nakheel, which has built palm-shaped islands in the Gulf and has plans for the world's first kilometre-high tower, is dealing with a debt crisis caused by the collapse in the property market following the credit crunch.

After a visit to Dubai, ACE's chief executive, Nelson Ogunshakin, described the situation as "chaos". He has written to Lord Mandelson, the Business Secretary, to ask for political intervention. The most important developers in the United Arab Emirates, including Nakheel, are part of holding companies owned either by the governments or rulers of the federation's seven emirates, particularly Dubai and Abu Dhabi.