The block in Berkeley Square, one of London's most sought-after locations, was to have been the headquarters of Concert, the company created from the planned merger with MCI.
It would have housed 150 top BT staff including Sir Iain Vallance, chairman, and Sir Peter Bonfield, chief executive, though other staff would remain it the current BT Centre near St Paul's Cathedral.
BT signed a 15-year lease on the block in August, but confirmed yesterday that it would no longer be moving into the building and was seeking another tenant. The company had previously hinted that it would use the offices whether or not the merger went ahead. BT admitted defeat a fortnight ago after WorldCom raised its rival offer for MCI from $30bn (pounds 18bn) to $37bn.
Despite the uncertainty over the merger, BT had recently begun fitting out the building, a task expected to cost at least another pounds 2m. The company said this had been confined to "preparatory renovation work," though this has included ripping out part of an expensive slate floor in the large entrance lobby. The steel and glass block has seven floors of offices, plus basements with car parking space.
Ralph Pearson, director of Chesterton's, which negotiated the original deal for Prudential, the building's owner, said: "We can confirm that the letting was completed in August and BT has been pressing on with fitting out the building."