But the prospect of stalemate looked equally likely yesterday when both government and private sector sources emphasised - despite their insistence that the project was not dead - that they would not give way over a condition by bankers that civil servants move to the stricken development in Docklands in return for private-sector involvement.
The meeting, on Thursday, to discuss the offer made by the banks, who lent more than pounds 600m to Olympia & York, Canary Wharf's developers, is expected to concentrate on ways of ensuring that any final proposal will be acceptable to the Treasury. It has come under fire for allegedly lobbying to kill the Underground project at last week's Tory party conference.
Lord Wakeham, Lord Privy Seal and leader of the House of Lords, is also, crucially, a member of EDX, the Cabinet public expenditure committee that is running this year's spending round. A final decision on the offer may take until the end of the month.
Ministers backing the extension fear that the Treasury will decide that the pounds 1.8bn due from the Government could be better spent elsewhere. Acceding to the banks' demand that 2,500 civil servants, mainly from the Department of the Environment, move to Canary Wharf would increase that risk, they believe.
One ministerial source insisted yesterday that there had never been any question of a link between relocating civil servants and the banks' rescue package - an initial payment of pounds 98m followed by a further pounds 300m phased over 28 years. He said: 'I want the deal to go ahead but it must stack up. You must be clear there is to be no link.'
He said that Michael Howard, Secretary of State for the Environment, had always made it clear he was seeking value for money and that any move to Docklands did not necessarily mean a move to Canary Wharf.
The Government has also been told that civil servants could be relocated in redundant Whitehall property which would otherwise have to be re-let, possibly with difficulty.Reuse content