Adored by Edina from Absolutely Fabulous (played by Jennifer Saunders) and other icons of consumerism, Harvey Nicks is in "delicate negotiations" to open an 80,000sq ft outlet at 68 King William Street - a prominent bay-shaped office building that dominates the view looking north from London Bridge.
A source in Harvey Nichols's estate department revealed last week that negotiations with the building's owners - Guardian Insurance and the City Parochial Foundation - are under way.
"We're still very much in the discussion stages," she said.
And a source working on the deal, when asked about the possibility of the department store locating in the City, said: "There's no smoke without fire."
If the deal comes off, Harvey Nichols will single-handedly revitalise retailing in the City. Currently, modern shops are restricted to a half- mile strip on Cheapside near St Paul's.
The Corporation of the City of London - the City's local authority and its most powerful landowner - is keen to attract more retailers to the Square Mile to prevent its 300,000 international workforce from thoughts of decamping to New York, Frankfurt, or Paris.
Harvey Nichols will have to gain planning permission from the City Corporation. But Michael Cassidy, a senior City Corporation figure, said this would not be a problem. "If this happens, it will be tremendously good news for the City," he said. "And the Corporation will do everything possible to make it happen."
Harvey Nichols is draper to the Queen Mother and supplies goods to Prince Charles. But it was the late Princess Diana's penchant for its fashion range that recently raised its profile.
The store was founded last century by Benjamin Harvey, whose death forced his daughters to go into business with Colonel Nicholas. The store was bought by the Burton Group in 1985. In 1991, Hong Kong retail magnate Dickson Poon took over the 155,000sq ft Knightsbridge store and spent pounds 10m transforming it into a symbol of affluence.