Hi Neil,
I am sharing 'Miriam Ellis' views on this. I'm sharing her views second time to answer community user's query :). It is very detailed and informative post on this. Please check once.
"I'm the Local SEO Associate here in the forum and I truly understand what a heartache and headache negative reviews can be and competitive spamming is just about the dirtiest trick in the book.
Okay...here's the deal...I would advise you to attempt to deal with the situation as it is rather than attempting to erase the whole thing and here is why: Google does not need your permission to create a listing for your business. Google began populating their index with 3rd party data, creating all of the Places (then called Maps) listings without any consent from the business owners. Thus, if you attempt to get rid of your listing, there is nothing to prevent Google from simply creating another at which point, even if your old reviews don't carry over (which they might), your rotten competitor will simply persist in spamming you. You will be right back in the same situation.
Unfortunately, I don't believe there is actually a way to 'opt out' of Google if your business is profiled anywhere on the web. You'd have to leave the whole web to be beyond Google's ability to create a Place Page for you. Does that make sense? I have spoken with not a few business owners who resent the powerful grip Google has on their business data and their fortunes. Understandable.
Here is an excellent piece from last year by Mike Blumenthal on this topic:
http://blumenthals.com/blog/2011/07/14/google-quickly-removes-most-review-spam-in-moving-industry-more-remains-at-google-and-elsewhere/
I have a couple of suggestions to offer:
Suggestion 1. Follow the steps outlined in my interview of Google Places Help Forum Top Contributors Mike Blumenthal and Nyagoslav Zhekov, (http://www.solaswebdesign.net/wordpress/?p=1128) namely:
7. What happens when business owners report competitors in the forum for possible spamming? Does this spark a manual look at the listing in question?
Mike: It would if the posting gets flagged by a top contributor and then brought to the attention of Vanessa. It would be best to Report the spam via Report a Problem first and then wait the requisite 4-6 weeks for a resolution before bringing it to the forums. The exception to that would be if someone was at risk due to the spam. It is always best to bring large scale, egregious examples into the forums.
Nyagoslav: It generally depends on the scale of the problem being shared. If it potentially harms a big number of users, then a manual look and action is taken. As spamming is widespread on Google Maps, Googlers tend to run from solving specific cases, but rather take them as samples to build the big picture which could help them stop the spam pattern.
Trojan, once you have managed to claim back your company's account, do the Report A Problem steps outlined by Mike. Make your report clear and thorough and link to the exact problem and describe the competitive spam behavior. Also, admit which negative reviews are actually from customers and are legit. If you don't see resolution in 6 weeks, take the problem into the Google Places Help Forum, which is currently moving house. New link:
http://groups.google.com/a/googleproductforums.com/forum/#!forum/maps
Suggestion 2: Contact a lawyer. If you can identify that there is a competitor in your town who is repeatedly spamming your reviews while faking positive ones for himself, draft a letter with a lawyer letting the competitor know what you have observed. The point here is to alarm him into taking down his lame reviews.
Suggestion 3. As others have said, you need to start acquiring more positive reviews. For the legit negatives, can you leave a response offering to make the situation better? I'm not sitting in front of your reviews, so I don't know if this suggestion is reasonable but if it is, do it, and move forward with more positive reviews.
So, in sum...my advice is to report the problem, take into the forum if nothing happens in 6 weeks, contact a lawyer and improve your positive/negative ratio by acquiring new positive reviews. I think attempting to delete the record would be futile and a waste of time.
Hope this helps! "
You can read full post here @ http://moz.com/community/q/removing-bad-reviews-by-removing-google-places-listing
Thanks