Reichmann in Docklands talks

PAUL REICHMANN, the force behind Olympia & York Developments, met the administrators of Canary Wharf yesterday, fuelling speculation that he may be part of a consortium involving Hanson that will bid for the project.

The administrators, Ernst & Young, would not say what was discussed at the meeting but it is understood that hopes are running high at the firm that a deal can be struck on the pounds 1.5bn project in the near future.

The Government is due to decide at the end of this week whether it will move 2,000 civil servants to Canary Wharf or to one of two other Docklands sites which are offering deals on space.

Ernst & Young has offered a deal in which the Government would buy a building and the administrators would plough the money back into the pounds 1.7bn project to extend the Jubilee underground line to Docklands.

Mr Reichmann was seen emerging from Hanson's offices in Belgravia on Friday. He was closely followed by Lord White, who heads Hanson's US arm, and John Ritblat, the chairman of British Land.

Mr Ritblat declined to discuss his involvement yesterday, but said he was advising clients and any bid would not involve British Land.

Hanson has said it is interested in a deal to save the project, but has not elaborated on its plans. However it is expected to be interested in taking advantage of the tax advantages in the Docklands development.

Li Ka-shing, the Hong Kong businessman, is rumoured to be interested. However a report that he had held meetings with the administrators in Hong Kong was denied yesterday.

O&Y revealed a Cdollars 2.1bn ( pounds 919m) loss on Friday, but said it had not written down the value of Canary Wharf in its books.