By INDERIA SAUNDERS, Guardian Business Desk, inderia@nasguard.com

Prime Minister Hubert Ingraham won't be moving immediately to cancel the lease of the Grand Bahama film studio although is now suggesting its 3,200-acre parcel should be cut back.

Gold Rock Creek is still in breach of its lease obligations as spelled out in its heads of agreement with the government, said the PM Friday.

"They have not done the things they were suppose to," he said in Abaco. "(But) the government is not minded to cancel the arrangement today."

Instead, the administration will engage in discussions with Gold Rock head Ross Fuller to determine how best to move forward.

"In those discussions we will be seeking to find the extent to which some of the land leased to them, which is 3,200 acres, ought not to be returned to the public domain," Ingraham said Friday. "We think the acreage is too large."

The assessment comes on the heels of a settlement reached between Fuller and a Freeport engineering firm that will pave the way for the sale of the studio, and one that will see the Tennessee-based banker pay out $300k to his former contractor. The agreement forestalls a court hearing and lifts an injunction blocking the facility's sale to a Bahamian-led group, FilmInvest.

The out-of-court settlement, reached just this month, will see Phoenix — the company alleging Gold Rock owes it for work performed but as yet unpaid — agree to variance of its injunction. The move effectively allows Fuller and FilmInvest's lead, Owen Bethel, to close on their sales agreement, providing, of course, government okays the deal.

"I know Mr. Bethel is involved in a company that has an interest and so is Mr. Cedric Scott, Bahamian personality," Mr. Ingraham said. "But that is where we are at now."

Only two months ago, the government had threatened to nullify the lease agreement and place the studio in the hands of another investor, one that could and would execute a plan to rehabilitate the studio's filming tank and develop a theme park to better connect the facility with GB's tourism industry. The original heads of agreement also includes a hotel component to further marry the two industries.

Since the shooting of Pirates of the Caribbean II and III, the studio has sat largely unused, although a small German production company was recently on-site to film an adaptation of a Jack London story.