Six possible buyers in talks on Canary Wharf

SIX potential purchasers are in discussions about rescuing all or part of Canary Wharf, Ernst & Young, the project's administrators, said yesterday.

Four have already signed confidentiality agreements to allow them to see detailed information, and the other two are negotiating to sign, said Stephen Adamson, one of the three administrators.

He added: 'The last few weeks have given us cause to be carefully optimistic.' The administrators' plans for the project are to be put to creditors at meetings towards the end of next month.

Mr Stephenson underlined the importance of the Government coming to an early agreement on a plan to buy one of the Canary Wharf buildings for up to pounds 100m to house civil servants.

That was the only way Canary Wharf could find the cash in time to make a significant contribution to the Jubilee Line underground extension. Negotiations with new investors could not be concluded in time for the initial funding.

Among those reported as having made overtures to the administrators about investing in Canary Wharf are Hanson, British Land and the Hong Kong businessman, Li Ka-shing. But Mr Stephenson refused to name any of the organisations because of the confidentiality agreements.

He said it was possible that a new investor would be a consortium rather than a single company, so that it could bring together property expertise, the capacity to use up Canary Wharf's tax reliefs of more than pounds 800m, and an organisation with cash.

Paul Reichmann, one of the brothers who built up Olympia & York, the Canadian developer of Canary Wharf, saw the administrators in London last week about a possible rescue consortium he was trying to organise.

Nigel Hamilton, a co-administrator with Mr Stephenson, said Mr Reichmann had been talking to groups of potential investors. The discussion with the administrators was over the mechanics of going ahead if he could bring enough investors together.

The administrators said a government decision to move civil servants into Canary Wharf was 'very important indeed' to the project and to docklands.

The development could survive without the Jubilee Line, but Mr Stephenson said: 'Some of the people we are talking to say, 'We are very interested, but we want to know the Government's attitude to Jubilee'. '

He also made the surprising suggestion that there could eventually be something left for the Canadian shareholders in Canary Wharf.

Planning permissions and foundations were ready for another nine million square feet of offices, twice the amount built. It was conceivable that in the late 1990s there would be some value in the rest of the site, he believed.

The administrators must do a deal with the shareholders if a rescue plan involves disposal of shares, which gives some residual negotiating influence to the Canadians.