The top bid to buy Battersea Powerstation from lenders including NAMA is from a buyer originally lined up as an investment partner by former owner, Treasury Holdings.
The latest twist in the Battersea Powerstation saga is sure to re-ignite the bitter legal dispute between Treasury Holdings and seller NAMA.
Malaysian investor SP Setia is understood to have topped the bidding for Battersea Powerstation (pictured) with a £400m (€499m) offer for the site in an auction run by Ernst & Young, according to a report in 'Property Week'.
NAMA is alleged to have refused to cut a deal with the same buyer last year, before seizing control of the site, according to a legal challenge being mounted by Treasury Holdings.
NAMA and UK lender Lloyds took control of the giant site in London at Christmas, appointing Ernst & Young as administrators over unpaid loans.
The loans were owed by Real Estate Opportunities, an investment firm backed by Treasury Holdings.
Treasury has launched a legal action seeking hundreds of millions in damages from NAMA over the decision to place the site in administration.
Dublin based Treasury claims the move needlessly cost it €400m in management fees, as well as hundreds of millions more in lost potential profits.
At the heart of Treasury's case is a claim that NAMA passed up an opportunity to be repaid in full by SP Setia, prior to the administration.
Under UK rules, a lender is not allowed to receive more than it is owed following an administration.
Treasury said in evidence filed with the courts that it had lined up SP Setia as an investment partner for the project. It said Setia was prepared to buy NAMA's share of the Battersea loans at full face value.
Sources at NAMA reject the claim. They said last night that the State-controlled bad bank had not received any offer that would have seen the Battersea loans repaid in full, until the latest auction.
The NAMA sources say the higher offers received following the administration bear out its strategy because it means taxpayers will get a full recovery if the SP Setia deal now on the tables goes through.
Only the Malaysian bidder, along with UK property investor Godfrey Bradman are understood to still be in the running for Battersea. It means Chelsea Football Club is out of the race to develop the iconic site. Chelsea owner Roman Abramovich was one of 15 bidders for the site and hoped to develop an iconic stadium for the club inside the derelict powerstation at the centre of the site.
A decision by the administrators on the winning offer could come as early as this week.