Banks invite Levene to take top Canary Wharf job

BANKERS who have lent more than pounds 500m to Canary Wharf have approached Sir Peter Levene, former head of procurement at the Ministry of Defence, to be chairman of the beleaguered development in a move to release it from administration.

Sir Peter, who at present divides his time between running the London office of the US buyout specialists Wasserstein Perella and chairing the Docklands Light Railway, has yet to say if he will accept the job.

However, senior bankers said they were 'quietly confident' that the former Whitehall mandarin - who rejected an approach from Olympia & York's Paul Reichmann to head Canary Wharf before it collapsed - would accept this time.

Sir Peter, 53, is known to be close to Michael Heseltine, President of the Board of Trade, who hired him when Minister of Defence from United Scientific Holdings, the defence contractor he built up. His appointment at the time caused a storm, not only because of his 'poacher turned gamekeeper' role but also because of his salary, which was twice that of his predecessor.

Ernst & Young, the administrators appointed a year ago, are in talks with the banks about a plan to bring Canary Wharf out of administration through a voluntary scheme of arrangement - the largest of its kind contemplated in the UK.

In the arrangement the banks would provide pounds 200m of extra finance - of which just under half will come from the European Investment Bank - to fund the completion of the project and the commitment, made by O&Y, to contribute to the cost of the Jubilee Line extension to Docklands.

Ernst & Young is hoping to be able to post the terms of the scheme of arrangement to creditors in the next few weeks. If approved, Canary Wharf would be reconstituted as a private company.