ANTIQUES SHOPS

Fittingly, the most decorated Olympian of all, Michael Phelps, seeks to add to his 14 gold medals of the last two Games in a titanic clash with fellow American Ryan Lochte in the pool.

Cycling world champion Mark Cavendish aims to set the host nation on the way to its best ever Games with victory in the men's road race.

Britain's Queen Elizabeth declared the Olympics open after playing a cameo role in an opening ceremony designed to highlight the grandeur and eccentricities of the nation that invented modern sport.

"In a sense the Olympic Games are coming home tonight," International Olympic Committee (IOC) president Jacques Rogge told a crowd of 60,000 in the stadium and a television audience of perhaps a billion more.

"This great, sports-loving country is widely recognised as the birthplace of modern sport."

The ceremony provided a spectacular and often surreal sweep through three centuries of British achievement in science, social reform and the arts, each generation inspired by and building on the achievements of the last.

The 86-year-old queen, marking her Diamond Jubilee this year, put aside royal reserve in a video where she stepped on to a helicopter with James Bond actor Daniel Craig to be carried aloft from Buckingham Palace.

A film clip showed doubles of her and Bond skydiving towards the stadium and, moments later, she made her entrance in person. It was a moment of rare informality from a figure revered for her devotion to duty and sense of continuity rather than her common touch.

Having pledged to present a democratic image of the Olympics, it was appropriate that Oscar-winning film director Danny Boyle should shun celebrities for the lighting of the cauldron that will burn for the duration of the Games.

TEENAGE ATHLETES

Media speculation was feverish about which sporting hero would get the honour but instead, in keeping with the ceremony's theme of "Inspire a Generation", seven British Olympic greats passed the flame to seven unknown teenage athletes.

They in turn lit a spectacular arrangement of more than 200 copper 'petals' representing the participating countries, which rose up in the centre of the stadium to converge into a powerfully symbolic single cauldron.

More than 10,000 athletes from 204 countries will compete in 26 sports over 17 days of competition in the only city to have staged the modern Games three times.

The first medals will be won in the women's 10 metres air rifle. But the biggest event of the first day is in the pool where Phelps defends his 400 metres individual medley title against Lochte.

Phelps, winner of a record eight gold medals at the Beijing Games four years ago, will become the first man to capture three consecutive Olympic swimming titles in the same discipline if he succeeds.

However, Lochte finished first in the U.S. trials this year and has exuded confidence this week.

"I know this is going to be my year," he said. "All the training I have put in is going to pay off. I know it.

"I just know I am ready. I am not going for silver or bronze. I am going for gold."

Phelps is to retire after these Games but the seven events he is competing in will give him ample scope to gather the three medals of any colour he needs to overtake Soviet gymnast Larisa Latynina's record haul of 18.

He was relaxed and affable during his media commitments this week although still fiercely competitive.

"I'm more emotional because these will be the last competitive moments of my career," he said. "Once I get into the pool I won't be holding back."

CYCLING GLORY

Sprint specialist Cavendish was the only member of the all-conquering British cycling team who failed to win a medal in Beijing.

But this time he has the expert support of four elite competitors, including his country's first Tour de France champion, and the backing of a British public inspired by the success of the riders to take part in competitive and leisure cycling as never before.

Six days after his triumph in France, Bradley Wiggins will devote his efforts to helping Cavendish win the 156-mile (250-km) circuit to the south of London, beginning and ending outside Buckingham Palace.

He will be assisted by Chris Froome, second in the Tour, fellow stage winner David Millar and British champion Ian Stannard.

"There's only Ian who didn't win a stage," Wiggins said. "We are all quite humble about our achievements but externally we must look an incredibly dominant force. It's no secret that Cav wants to win but he's got four incredible guys to help him."

The British tactics are also no secret to their rivals. The support riders will try to ensure Cavendish does not trail the leaders by too big a margin on the steep Box Hill, which must be climbed nine times, so that he can chase and overtake them on the way down.

The fact he will be a marked man adds to the pressure on Cavendish of being expected to secure his first Olympic gold and Britain's first of the Games.

"An Olympic medal, regardless if it's the first or last on offer, is an Olympic medal for your team," he said.

"It's easy to get emotional about it - I've been nervous this week. We've trained to be able to deal with those nerves and we've got to put it to bed."

(Additional reporting by Stephen Addison, Gene Cherry, Guy Faulconbridge, Vincent Fribault, Peter Griffiths, Sara Ledworth, Mike Collett-White; writing by Kevin Liffey; editing by Mark Trevelyan and Tony Jimenez)

The disclosure came in court documents filed on Friday by lawyers for James Holmes, 24, who is accused of opening fire last Friday on a packed showing of the latest Batman movie, "The Dark Knight Rises," in the Denver suburb of Aurora.

The defence attorneys, in their request to an Arapahoe County district judge, are seeking a court order requiring prosecutors to turn over the contents of a package that Holmes sent to Dr. Lynne Fenton and was later seized by investigators.

"Mr. Holmes was a psychiatric patient of Dr. Fenton, and his communications with her are protected," the filing said.

Fenton, medical director for student mental health services at the University of Colorado-Denver Anschutz Medical Campus, provides medication and psychotherapy for grad students in addition to her teaching duties, according to a school website.

A professional biography of Fenton posted on the site said she had conducted research on schizophrenia, including a two-year grant to work in the schizophrenia research department of the U.S. Department of Veterans Affairs from 2008 to 2010.

Fenton is also a member of the campus-based "behavioural assessment and threat assessment team," which helps faculty and staff deal with "individuals who may be threatening, disruptive or otherwise problematic," according to that group's website.

It could not be ascertained if Fenton was caring for Holmes under the threat-assessment program or under routine counselling she provided to students on campus.

Under Colorado law, mental health professionals cannot be held liable in civil suits for failing to predict a patient's violent behaviour unless it involves a "serious threat of imminent physical violence against a specific person or persons." When such a threat is made, the mental health professional is required to take action, which may include notifying those targeted or a law enforcement agency.

Fenton could not immediately be reached by Reuters for comment, and a spokeswoman for the University of Colorado medical school declined to comment, citing restrictions under a gag order issued by the judge presiding over the case.

The university, where Holmes had been enrolled as a doctoral student of neuroscience, confirmed earlier this week that a suspicious package was delivered by mail on Monday and that it was "immediately investigated and handed over to authorities within hours."

DEFENSE LAWYERS SEEK SANCTIONS FOR MEDIA 'LEAKS'

Fox News has reported, citing an unnamed law enforcement source close to the investigation, that two packages were sent by Holmes to a psychiatrist on the faculty of the University of Colorado, and that one contained a notebook detailing the shooting scenario. According to Fox News, the notebook contained hand-drawn illustrations of stick figures shooting at other stick figures.

The defence motion accuses the government of leaking information to the media in defiance of a gag order, thereby jeopardizing Holmes' rights to due process and fair trial by an impartial jury. It says his lawyers will request a hearing to determine "appropriate sanctions for this misconduct."

Prosecutors, responding to the discovery motion, disputed various elements of media accounts as being erroneous, suggesting that anyone who had provided information to Fox News and other outlets lacked real knowledge of the case.

"These factual errors lead (the government) to believe ... that the media is getting information from hoaxers, fraudsters, or maybe from nobody at all by creating fake 'law enforcement sources' out of whole cloth," prosecutors said in their filing.

Formal charges against the suspect, who dyed his hair bright orange and was said by authorities to have referred to himself as the Joker - Batman's comic book archenemy - are expected to be filed in court on Monday.

The judge in the case, William Sylvester, set a hearing on the defence discovery motion to be held as part of Monday's proceedings. Sylvester also said he would consider a pleading by news media organizations to make public court documents the judge has sealed in the case.

Arrested within minutes of the shooting rampage at his car in the theatre's parking lot, Holmes is being held in solitary confinement in the local jail.

In addition to charges stemming from one of the worst outbursts of U.S. gun violence in recent years, he is accused of wiring his apartment with enough explosives to have levelled the entire building if they had been detonated.

The apartment house was evacuated when the booby traps were discovered. But the explosives were later safely dismantled and removed by authorities, and Holmes' neighbours began returning to their homes on Wednesday night.

The latest disclosures about the suspect came to light as mourners attended the third funeral in as many days for one of the victims of the shooting rampage, this one for an 18-year-old high school graduate, Alexander J. "AJ" Boik," who was bound for art college in the fall.

Aurora's Queen of Peace Catholic Church was filled with hundreds of mourners, including Colorado Governor John Hickenlooper, Aurora Mayor Steve Hogan and a contingent of Aurora police officers and firefighters.

Boik was one of the youngest among 12 people, aged 6 to 51, killed in the hail of gunfire early last Friday, just after midnight. Of the 58 wounded, 12 remain hospitalized, including five in critical condition.

(Writing by Steve Gorman and Dan Burns; Additional reporting by Mary Slosson in Sacramento, California, and Andrew Longstreth in New York; Editing by Peter Cooney and Lisa Shumaker)

The proposal - called a "community enhancement fee" and unprecedented in the island's history - is effectively a 10 percent payroll tax on all foreign workers earning income over US$24,000 in the Cayman Islands.

Blaming the previous administration and Britain's hard line on the island's budget for the current financial problems, the premier said the measure was the least onerous approach with the Cayman Islands already one month into a new fiscal year.

"This is a tremendous step away from the normal government budget, but (London) has the upper hand," Cayman Islands Premier McKeeva Bush said.

Barely two years ago, in the face of pressure from Britain to increase the territory's revenue, Bush stated "our position is, and will continue to consistently be, that we do not believe that direct taxes are good for this country."

While foreign workers make up about 50 percent of the labor force, there are plenty of loopholes that would exclude the majority of the top earners in the county as well as civil servants, leaving the bulk of the payroll tax burden to middle- class income workers in the private sector.

The 10 percent tax proposal has shaken up the business community in the Cayman Islands, with some calling for a public protest against "taxation without representation" on Monday.

The territory, a beach-lined group of islands south of Cuba, is home to most of the world's hedge funds and has long relied on the "no direct taxation" model as a cornerstone of its lucrative financial industry.

Experts say the amount of extra revenue the new payroll tax would bring in would not be enough to overcome the government's growing deficit problems and could drive international firms to move operations out of the territory to other competitive jurisdictions with lower business costs.

Two years ago, a government-appointed commission studied the direct tax and noted the international financial sector could easily move their operations to competing jurisdictions.

Representatives from the Cayman Finance Association said the government has not done enough to rein in government spending to justify a measure such as a payroll tax.

The British Virgin Islands, Bermuda, Ireland and Canada were actively enticing firms to relocate from the Cayman Islands, the report said. (Editing by David Adams; Editing by Paul Simao)