O'Rourke considers legal action over St Pancras

Laing O'Rourke is understood to be considering a multi-million pound lawsuit against The Manhattan Loft Corporation (MLC) in an effort to recover its costs at St Pancras Chambers in London.

O'Rourke walked off the £80m job last week following a bust-up with the client over plans to phase the contract into two separate elements.

A source close to the project said: "O'Rourke put a lot of effort into winning this job and has done quite a bit of site preparation work so far. You'd be talking about a million pounds-plus in compensation on a job this size.

"I wouldn't be surprised if the whole thing went legal considering what's happened. It's not often you get a breakdown between two sides like this on such a prestigious job."

Laing O'Rourke declined to comment.

Meanwhile, MLC is looking to draw up a shortlist of four contractors to fight it out to replace Laing O'Rourke, CJ understands.

Galliford Try has been drafted in, but it is believed it is only making the site secure before a full-time replacement is found.

A number of leading contractors have been approached, but were not keen to do battle on a new tender list.

A senior source at one firm said: "Manhattan Loft asked if we would be interested but we turned it down when we heard it wanted to draw-up a shortlist of four. We might have done it if we were going to be brought straight in but didn't have any interest fighting it out to replace O'Rourke."

An MLC spokeswoman dismissed suggestions of a four-way battle. She said: "No shortlist has been drawn up. Galliford Try is the interim contractor and we will be reviewing the situation over the next couple of months."

A small Galliford Try team is now on site assessing the project. A spokesman said: "We have literally only been down there a few days so we are just finding our feet."

Planning permission for the project to build 68 luxury apartments and a 245-bedroom hotel was granted in March 2005. O'Rourke started on site at the end of last year.