The pig is taxiing for take-off

The project certainly doesn't lack ambition. It comprising a total of 405,031 m² of space, including a central retail development in the power station, two hotels which between them have 1100 bedrooms, a conference centre, offices, a futuristic 2200-seater theatre and 650 units of housing. There is also a 3500-space car park and a pedestrian bridge across the Thames. But the real question is will the pig become airborne?

One thing is certain, Europe's biggest brick building with its four unmistakable 102 m chimneys, presents a unique challenge. The sheer scale and scope of the power station and the site make it a blessing and curse. In terms of space, comparisons with cathedrals are often used in describing recent schemes such as Foster and Partners Canary Wharf Jubilee Line station and the Tate Modern. But these are new-born piglets beside what could be created, and already exists, inside the power station. A concert in the late 1990s, featuring The Prodigy and Robbie Williams among others, was attended by a crowd of 5000 - and that only filled half the space. According to one project team member, you can accelerate in a car from 0-60 inside the building. It offers mind-boggling opportunities. "It's truly scary, the scale of the thing," says Ian Rumgay, Parkview's head of communications, staring up to the chimneys.

Despite the obvious advantages, it's this scale that can trip up even the most ambitious of developers. Just remember flamboyant businessman John Broome. A favourite of then prime minister Margaret Thatcher, Broome made his mark by establishing Alton Towers theme park in the 1980s. His attention then turned to Battersea – he bought the power station site for £1.5m and launched a high-profile plan to turn it into another leisure park, or as he put it at the time a "colossal pleasure palace".

After spending the late 1980s tweaking the scheme to suit the whims of its ever-changing backers, Broome finally surrendered in 1990, when his company collapsed. Among the creditors whistling for a total of £20m was Sir Robert McAlpine, which had started work on the site.

It was after Broome's botched attempt, that Hong Kong-based developer Parkview stepped in. Since then, however, some of the familiar problems have continued with a series of delays and team and design changes – à la Broome. The question is whether the fate of the Parkview project - it's now 10 years since the firm bought the site - will similarly end in tatters. Has there been any progress to suggest otherwise?

When Building paid a visit to the power station last month, it was clear that doubts linger. The power station shell remains its starkly beautiful and austere self; tiny remnants of work started by John Broome in the western part of the building testify to the scale of the task.

The lack of any signs of movement on site breeds cynicism and contempt among the public and rival developers. They suspect that the plans are a mirage – a ploy to ratchet up the land price. A common perception among developers is that the site's eventual fate will be to follow the trend that has engulfed riverside sites in London and across the UK – to be turned into luxury flats. In 1999, speculation emerged that Parkview was talking to housebuilders such as Berkeley Group, which owns the neighbouring Battersea Wharf site.

These rumours faded, but the public belief remains that Parkview may try to avoid ever actually developing the station – a suspicion that the 20 years of inaction does little to dispel. This is not the case, according to Parkview's Rumgay. "There are two urban myths about this scheme," he says. "One is that there have been hundreds of plans – when there have been only two. The second is that we are sitting on this land, waiting for the power station to fall down or for property prices to go up."

The visit offers proof from Parkview that there are no such ruses. The developer has instigated a £3.3m civil engineering job, carried out by contractor Murphy, to rationalise the water pipes on the site into one large one on the station's east side. There are plans in the second half of 2003 to move an old Dalkia heating plant from the western boundary of the site to the eastern side of the power station to provide a modern energy supply for the new development.

Other continuing work includes £100,000-a-year maintenance to keep the power station in its current condition. On top of this, consultant Buro Happold is in the middle of a detailed structural study of building itself, which will enter its second stage this summer. Parkview is working with neighbours, including four London borough councils, which jointly own a waste transfer plant, and materials group RMC, which has a concrete plant, to spruce up the area to the east of the site. Rumgay believes such work, especially such noticeable work, will begin to have a psychological as much as a physical effect. "These things take a lot of time," he says. "By making these gestures, we will inch towards an understanding of what the long-term future of this site could be."

The sheer size of the task ahead, in planning and logistical terms, puts Parkview in a much more sympathetic light – and suggests that the perception of inaction is unfair. The developer has had to interact with 150 different interest groups and bodies during its long quest for planning permission, which is presently in its final stages. There is a 50-strong project team at offices on site, and this month a marketing suite will be in place – no less than Toyo Ito's pavilion seen last year at the Serpentine Gallery in Hyde Park, which is to be rebuilt at the entrance to the power station.

Project sources point to the two forceful personalities driving the scheme as offering further proof of genuine commitment – Parkview president Victor Hwang, who is now based on site here full-time, and chief executive Michael Roberts. Hwang, who runs the business with his brother George, has taken some big risks to get this scheme this far, according to one team member. "Victor has very strong views on what he wants," the source says. "The family has taken a long, long view on this. They've spent six years without doing anything physically, and spent a very significant amount of money and time to get it to full planning." Roberts is overseeing the scheme's procurement and is, according to another consultant, a "very challenging individual" who "doesn't beat about the bush".

So with at least some work under way, surely there's room for optimism? Rumgay asserts that Parkview is now moving into more of a marketing mode, an expression presumably of higher confidence levels. There are glossy brochures, a trip by Parkview to retail fair MAPIC at the end of last year to show off the scheme and increasing numbers of guided tours around the site for interested parties. Rumgay even hints at a 2007 date for the project to be open to the public.

Yet before we start chinking champagne glasses to toast the final season of an epic construction saga, there are two crucial outstanding issues to be resolved. Veterans on the project team point to the procurement, which Parkview says will be finalised by the end of this month, as one. Getting this right will ensure costs can be kept controllable, a key to the scheme stacking up commercially.

The procurement decision is twofold, according to market experts. Parkview could create an in-house Canary Wharf-style management contractor to oversee the scheme, which would need an experienced construction director with experience of the odd megaproject to lead it. Alternatively, the developer could appoint an outside firm to handle the job. Market sources say there are two firms that could handle such a scheme: Bovis Lend Lease (whose parent Lend Lease is already offering Parkview consultancy advice) and fellow Australian Multiplex, a relative newcomer to the UK market. Choosing the option of an outside firm will come at a premium. One consultant says an outside management contractor would charge about 10% on top of the construction cost to take on the risk, which some predict would come to £40m. As one consultant says: "Parkview will pay through the nose."

But judging how it is to be built depends on the commercial viability of the scheme. In particular the conundrum of the power station itself, most of which Parkview plans to turn into a retail complex. Look back at Broome's 1980s plans and it is clear that getting the scheme moving is about as easy as waltzing with a wild boar. The bargain-basement price paid then – £1.5m – included the proviso that Broome keep the grade II-listed power station intact. Broome then faced the rising costs of redeveloping the building, which eventually scuppered his bold plans. Before his scheme finally collapsed at the end of the runway, the idea of delisting the building was considered by Broome. Estimates in 1990 put the value of the land at £300m without the power station.

Parkview reckons that its construction costs for redeveloping the power station will total about £175m. Senior sources on the project team, however, have their doubts as to the viability of that central scheme. For one thing, there is the outstanding issue of whether Lend Lease, at present in a retail consultant role, will convert to a full development partner. According to project insiders, the two have been due to sign a contract since last autumn. A decision has now been put back to early summer, it seems, to coincide with – or precede – a decision on which procurement strategy to adopt. But a Parkview source is a little more coy on the subject of these talks, describing a joint venture as a "possibility".

Senior sources say the power station scheme, designed by architect Grimshaw, will need to be rethought. One felt that as a piece of architecture, it had tried to comply with listing restrictions at the expense of taking care of the retail aspect of the project, saying: "The scheme was designed to get successful secure planning permission."

Whether it's a true retail experience, and hence a moneymaker, is in doubt, according to those who have seen the plans. "The retail element is the crux of it," as one consultant puts it.

Another observes: "The basic point is, you can't afford to spend several hundreds of millions of pounds on the power station and expect it to be funded by added value from other works around it. I don't think that stacks up. That's the dilemma."

Parkview's Rumgay Lend Lease is currently assessing the commercial viability of the projects. He adds that the idea of splitting the power station into two separate retail "experiences" – one a traditional shopping mall, the other more avant-garde aimed at London's hip and trendy. Rumgay stresses that getting the power station right has always been the key issue. "Absolutely," he says. "That's always been the premise – that the power station has got to look after itself."

If all goes well, the summer could have what project insiders philosophically see as another "key stage" towards resolution. "There's one about every six months," a source adds ruefully. Although Parkview is emitting confident noises on future hopes for action on the site, project team members are cooler on how and when. After all, the (mainly civils) work done so far is necessary to make building possible on the site, regardless of what that building turns out to be. One source argues that until the key retail and procurement decisions are made nobody should hold their his breath. So although one cannot see a collapse similar to the the one that befell Broome's plans, the timing of the development may well remain flexible. After all, as the developer has argued, Parkview's project is completely privately funded so when and how they develop is up to them, and up to market forces. This particular pig is going to make sure its wings are working before it begins its ascent.