The up-turn in the commercial property scene has not been confined to C anary Wharf. David Lawson reports on the growing market
Sir Peter Levene is ignoring the TV set in the corner of the room. That seems strange, as he is a special adviser to the Prime Minister, and it is Budget Day.

"I've done my bit," he says, only half joking. For the moment, at least, the building around us is far more important.

Sir Peter wears many hats: businessman, merchant banker, government adviser on efficiency. Other headgear lie discarded around his feet, ranging from a stint as the country's leading arms salesman to chairman of the Docklands Light Railway.

A year ago, however, this knight appeared to need more sturdy head protection as he rode to rescue Canary Wharf from the dragon of bankruptcy. To some, he was championing the wrong side. The great silver tower is still seen as the real monster - and it rankles.

"There is a huge gulf between perception and reality," he says. This is the best development in Europe. I always thought it would be bad for London if allowed to fail."

As chairman of Canary Wharf Limited, brought in by the banks to sort out more than £550m in debts, he would think that way. But for the first time, the message appears to be penetrating a wall of doubt.

In the last month two major financial groups, Morgan Stanley and BZW, have proposed taking massive amounts of extra office space. The tower is also getting a better Press after turning into " Fleet Street in the sky" by opening its doors to The Independent, its Sunday companion, the Mirror and the Telegraph groups. Even the shopping centre has taken on the gloss of a West End street, dispelling the image of a half-dead inner city mall.

This is partly because of the economic recovery, but also due to completion of routes into Docklands. Sir Peter uses his wide range of top-level contacts to sell the scheme, inviting company chairmen in to lunch at the tower.

"Most think it is the other side of nowhere, so they invariably arrive 25 minutes early," he says. He points out that this is longer than it takes him to drive in each day from his home near Regent's Park.

The developers, Olympia & York's Reichmann brothers, were just as enthusiastic about breaking through this myth of inaccessibility. But in their day visitors were likely to end up stranded in a Wapping traffic jam or a stationary light-rail carriage.

"The Reichmanns were unlucky rather than foolish to build Canary Wharf," says Sir Peter.

They also failed to understand local prejudice. Foreign companies have no problem appreciating the cheap rents and high-quality buildings, but our financial giants need to be wooed into locations that are "not quite right for us".

The subtle approach appears to be working, as 75 per cent of the 4.5m sqft is now reserved. There are even murmurings that an even bigger second phase could begin soon.

When the white knight arrived a year ago the merest suggestion of more offices at Canary Wharf would have been laughed off. Now even critics are not so sure.

Sir Peter is cautious, predicting another two or three years to fill existing space. "But we are now past the critical mass, with 13,000 people here. We don't have to wait for the Jubilee Line to claim success."

When the line does open, however, history will be turned on its head. For the last few years tenants have blamed lack of access as the main reason for staying away. From 1998, there will be more than enough transport capacity in advance of development. And it could be the trigger for starting the 8m sqft of offices still on the drawing board.

And what then for Sir Peter? Insiders say his biggest ambition is to diffuse the idea of the City and Canary Wharf as rivals. He sees them more as sisters. And a more illustrious hat may be waiting in the closet which will achieve this feat.

As an alderman of the City, he could progress to become Lord Mayor by the end of the decade. What better way to welcome the Millennium than as joint head of the City of London and Canary Wharf City?