The bank which spent £60m and eight years working up plans for the £1.5bn development of Silvertown Quays in east London has withdrawn its threat to sue the London Development Agency over the termination of the scheme, Building understands.

Two sources said Bank of Scotland, which had bankrolled developer SQL to the tune of £60m, was advised it was unlikely to win the case.

SQL signed a development agreement with the LDA, the owner of the site, the in 2002, only to have it terminated by the agerncy in February this year. SQL had been planning to build an £80m aquarium and 4,900 homes but had after eight years it had failed to begin construction work.

The news means that the LDA, working with Newham council, can press ahead with plans to develop an alternative vision for the giant dockland site.

It has applied to have the planning permission for the site, which was due to expire this month, extended, and last week it announced that Siemens was to build a £30m headquarters on it. The electronic firm will commission a sustainable technology visitor attraction, designed by Wilkinson Eyre, on an adjacent plot.

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