The Millennium Dome was briefly mooted to become a tribute to Diana, the Princess of Wales, and also faced the prospect of being scrapped altogether, as previously classified documents reveal the doomed project was in serious trouble more than two years before it opened.

Tony Blair endured major concerns about the future of the landmark development as soon as his New Labour government agreed to continue with the project first conceived by his predecessor, John Major.

Even in the middle of 1997, with around 1,000 days to go until it opened to the public in Greenwich, east London, there were fears the Dome – built to symbolise the dawn of a new era – may not be completed in time, that it would fail to attract the 8 million visitors required in 2000, and that the building would overheat in the summer.

The developers even considered replacing the dome structure with a series of “sheds” in an effort to save costs, although this was immediately dismissed due to the time and planning constraints.

The death of Diana, in a car crash in Paris on August 31 1997, caused some involved in the project to call for the dome to reflect the tragedy.

A letter to the Prime Minister by his director of communications, Alastair Campbell, two days later described how Sam Chisolm, on the Dome’s board, proposed that the “Millennium project be completely refashioned, the site extended, to accommodate, for example, a hospital, businesses, charities, private residences, and the whole thing named ‘the Princess Diana Centre’”.

Other correspondence from later in September 1997, released by the National Archives in Kew, disclosed how Mr Chisolm envisioned an “eighth wonder of the world” attraction with a range of facilities, technology and housing, and being a “lasting and appropriate tribute by the people to Diana”.

Ministers were told the idea would “not go down particularly well with the royal family”, something Mr Chisolm claimed to see “as a pretty big plus”, the documents suggest.

But Diana’s death also brought with it opportunity – specifically to pull the plug.

A letter from aide James Purnell to the Prime Minister the following month said: “Clearly, there would be a significant political downside to cancelling the project.

“But if the risk of failure is too great or public attitudes harden before it’s able to prove its success so that the political cost becomes intolerable, it would be better to take that pain now than far greater pain in the year 2000, much closer to an election.

“Moreover, Diana’s death could give us a semi-plausible excuse to cancel.”

Peter Mandelson, who was installed as the effective Dome minister, conceded that the “majority opinion is that we are building a white elephant”.

And businessman Richard Branson – who this month raised the prospect of building “a hotel off the moon” after successfully flying to the edge of space – described the Dome in a letter to Mr Mandelson in 1997 as “an extravagance of monumental proportions”.

The £758 million Dome was opened amid much fanfare on December 31 1999, where guests included Mr Blair and the Queen.

However, the attraction drew only 6.5 million visitors during 2000 – having budgeted for 12 million – and it was closed to be replaced with The O2, which has hosted concerts, sporting events and other entertainment since June 2007.