Prime Minister Lee Hsien Loong acknowledged the outcry against legalising casinos, which had also split the cabinet, but said the government had decided to seek firm proposals for two integrated resorts (IRs).

"We want Singapore to have the X-factor -- that buzz that you get in London, Paris or New York," Lee said in a televised speech in parliament, appealing for support for his first major project since becoming prime minister last August.

He said it was in Singapore's "national interest" to go ahead with the casinos because it was in danger of becoming a "backwater, just one of the many ordinary cities in Asia" instead of a cosmopolitan hub.

Government critics and anti-casino campaigners slammed the announcement even if it came as no surprise following a series of hints from ministers about the decision.

Lee stressed the casinos would account for only a small portion of the planned "leisure, entertainment and business zones" which would boast hotels, convention facilities, theaters, museums and theme parks.

Hong Kong will soon open a Disneyland and is looking at a casino to rival those in neighbouring Macau, Thailand is likely to go the same way and Malaysia already has the Petronas Twin Towers and a Formula One racetrack, Lee said.

"The question we have to consider is: will Singapore be part of this new world or will we be bypassed and left behind?" said the son of Singapore's founding premier Lee Kuan Yew, who had rejected casinos while in power.

A total of 19 potential developers, including Las Vegas gaming giants, had submitted concept proposals in the initial phase of a government study that ended in February.

"After studying their bids and considering all the views expressed, the cabinet has decided to proceed with the project and to call for firm proposals to develop two IRs at the Marina Bayfront and Sentosa," Lee said.

Having two separate projects would promote competition and the two locations would complement each other and attract different customers, Lee said.

The Marina Bayfront borders the financial district while Sentosa island is a popular family destination, with golf and beach facilities and a newly-launched luxury residential enclave.

The project had sparked a rare and highly-charged public debate in Singapore, with opponents from church and social groups spearheading a robust campaign to maintain a ban on casinos despite the existence of horse racing, lottery and sports betting franchises.

Critics said that unlike other forms of betting, 24-hour casinos would spawn more gambling addicts, ruin families and taint Singapore's image as a wholesome destination.

But Lee said Singapore had to change its "unexciting" image and promised that safeguards would be in place to minimise the negative social impact of casinos on the local population. He rejected a proposed ban on local players, saying it would amount to discrimination.

Singapore's share of international tourist traffic has been declining and visitors are spending less time in the city-state, staying an average of three days here compared to four days in Hong Kong, five days in London and a week in New York, Lee said.

"We are losing attractiveness as a tourist destination.

"We have not been investing in tourism infrastructure projects that are crowd-pullers so there are too few things to do that hold the attention of the tourists," he said.

A record 8.3 million people visited Singapore in 2004 -- almost double the local population -- and generated receipts of S$9.6 billion (US$5.8 billion). It is hoping to attract 17 million arrivals and receipts of $30 billion annually within a decade.

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