Despite a £1 million drop in ticket revenues last year, the Eye would be making a healthy profit if it were not for the 25 per cent-a-year interest rate being charged on the loan by British Airways.
Latest accounts show that the attraction lost £17.6 million last year compared with £10.9 million in 2002.
British Airways spent £48 million building the wheel five years ago. Since then, the debt owed to the airline has increased to £130.6million as the interest piled up. Last year's repayments totalled £29 million.
"In the late Nineties no one else was interested in funding a high-risk project of this kind. It was seen as an acceptable rate of return," a BA spokeswoman told the Evening Standard on Friday.
London Eye managing director David Sharpe said: "The company is very keen to push this refinancing through because otherwise the business is doing well. Bookings in the run-up to Christmas are very much up on last year."
3.6 million people are expected to have visited the London Eye during 2004.
For the latest local news and events direct to your inbox every Monday, you need our weekly email newsletter SE1 Direct.
7,000+ locals read it every week. Can you afford to miss out?
Read the latest issue before signing up