Our tower's bigger than yours: City and Docklands in skyscraper duel

Norman Foster designs 1,000ft block for bombed Baltic Exchange site

The City of London has got its revenge at last. In its lengthy battle to trounce Docklands as the financial capital of London, the Square Mile has found the answer to Canary Wharf - and it is 1,000 feet high.

Next month, Sir Norman Foster's design for a skyscraper for the City of London will be unveiled, against a background of protests from the Victorian Society and possible legal action from the Baltic Exchange on whose old site - bombed by the IRA - the building will rise.

It won't just be the tallest tower in Europe, nor will it just be an office building. It will also house some of the most glamorous homes in London - a set of apartments high above the City's dealing rooms - and a restaurant, a veritable room at the top.

Ever since the Canary Wharf tower was built, it has been a beacon on the skyline of London, alerting the people of the capital and international business to its claim to be the biggest, the brightest and tallest of all. Now the City is just a planning permission away from having its very own state of the art skyscraper. With its Manhattan mix of workspace, eateries and penthouses, the Foster tower will be like nothing else that London, and most importantly, Docklands, can offer.

Nobody is sure yet whether Sir Norman, creator of the HongKong and Shanghai Bank's 41-storey Hong Kong headquarters, will design a building in his usual signature of sleek steel and glass, or whether he will offer something dramatically different. But the City appears already to have welcomed the plan, gleeful that it will get a new skyscraper, the embodiment of business confidence, right in the heart of the Square Mile.

Alan de Winter, managing director of Trafalgar House Properties, the developers of the tower, said: "The City is very keen to prove that nothing in Docklands matches the City's power. It is very keen to keep its occupiers and get new ones, and it's conceivable that something like this will do it."

The bombed Baltic Exchange site is an ideal location for a skyscraper. It has no Tube lines beneath it, making it possible to dig the necessary deep foundations. Nor is there any limit on its height, as there are on other sites in the City, where tall buildings would restrict views of St Paul's.

But not everybody is happy. The Baltic Exchange itself is enraged by the plans. After the IRA bombed the listed Victorian building in St Mary Axe, the Exchange was told by English Heritage that it would have to reconstruct the teak-lined trading hall and facade if it wanted to move back in. Faced with that cost, the organisation moved next door and sold its site to Trafalgar House Properties for just pounds 10m - a price that was heavily discounted because of the high cost of rebuilding while preserving the listed features. "We swapped our old site believing it to be blighted for development by its grade II listed status," said Derek Walter, the exchange's chief executive until 1992.

Then English Heritage seemed to change its mind. In March this year Paul Drury, its London regional head, advised the City Corporation and Trafalgar House that the case for a wholly new building on the site would be enhanced "by the employment of an architect of international repute".

Trafalgar House duly brought in Sir Norman Foster, an architect whose international reputation is indisputable. His order book is jammed with multi-million pound commissions, from the Congress Centre, Valencia and the Commerzbank headquarters, Frankfurt, to the Chek Lap Kok Airport, Hong Kong. He is also working on numerous projects for London, including the British Museum's pounds 60m Great Court redesign and the Jubilee Line Tube station for Canary Wharf. He is dreaming up master plans for "Albertopolis", the museum quarter of South Kensington, and for Wembley Stadium. He is strongly tipped as the designer for the Channel Tunnel stations at St Pancras, Ebbsfleet and Stratford.

The City's planning officer, Peter Rees, said: "From our point of view we are only too pleased to have architects of this quality, although it not up to us to choose them. But we do have a hand in discussing materials and the scale of buildings. There are parts of the City where we want to see buildings as 'statements'. That enhances the City."

Bringing in Sir Norman Foster to design a "statement", however, has failed to placate the critics. The Baltic Exchange is contemplating legal action against English Heritage while the Victorian Society has complained to the Heritage department, expressing disbelief at the plans for a skyscraper, minus the trading hall.

"Should the tallest building in Europe be built at the site," said the Baltic Exchange's Derek Walker, "it will demonstrate that it is easier to survive the IRA than the bureaucracy of English Heritage."