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The apparent about-turn over the 68-storey residential tower comes amid speculation that it feels that Simpson's £500m residential tower will not receive planning permission.

Beetham intends to apply to Southwark council to revive the office scheme Foster designed for clients Sainsbury's and Stanhope. This won planning in 2002.

Beetham would be within its legal rights to drop plans for the residential tower, which has stalled in the planning process, and proceed with Foster's commercial scheme, as the permission lasts five years.

A company spokesperson said it wanted to make sure it could continue to use the original approval. He said: "Beetham is protecting the permission gained by Sainsbury's on its former headquarter site. Beetham will be amending its current application designed by Ian Simpson."

The move is an attempt to break the deadlock between Beetham and Southwark planners over the Simpson tower, which does not yet have a planning committee date, despite predictions it would be this month.

A source said planning officers were waiting for Simpson to radically rework the designs, and if it did then get consent a public inquiry would probably follow.

Beetham bought the site from Sainsbury's in November 2004 for £48m. Sainsbury's and Stanhope had earmarked the site for a19-storey Foster-designed 34,840 m2 office scheme.

Ian Simpson said: "This is just due diligence so as not to let the planning permission lapse. There is no chance of them building that scheme in my mind. They are also not looking to sell on the site. We are progressing the design and hope to have planning permission by the end of the year and start on site next year."