Plans to site Scotland's tallest building in Glasgow city centre appear to have been scrapped as a result of the global economic situation.

Plans to site Scotland's tallest building in Glasgow city centre appear to have been scrapped as a result of the global economic situation.

The team behind Elphinstone Place, on the site of the former Strathclyde Region Council offices in Charing Cross, have reportedly confirmed the £120m, 40-storey mixed-use tower will not go ahead as planned, and that a fall-back project is not in place.

They have also said that the credit squeeze is behind the shelving of the scheme.

It comes just weeks after the company behind the tower said construction would be delayed a year because of planning issues, as reported by the Evening Times.

The abandonment of the project is bound to fuel concerns over the billions of pounds of development in waiting across Scotland, with sources claiming public reports on the credit crunch are four to five stages behind the reality.

Sources within the development industry also claim a number of high-profile schemes are in jeopardy as the banks scale down their lending and increase interest rates while funders are reported to be pulling out.

Concerns were also raised over the weekend that the credit crunch could prevent the Scot- tish Government achieving its goal of increasing the rate of house building to 35,000 new homes per year by the middle of next decade.

The Elphinstone Place scheme, a joint venture between Glasgow developer Elphinstone and the now bankrupt Harrogate-based City Lofts, had been scheduled for construction to begin later this year.

The landmark tower, which was to have a unique teardrop design, was intended to house over 200 luxury apartments, 171,000sq ft in office space, retail outlets, swimming pool, 230 car parking spaces and, given its prominent position, would have been a beacon of a resurgent Glasgow for travellers coming in from the airport on the M8. At 134metres high it would have outstretched the 125-metre Glasgow Science Centre Tower.

Ken Ross, chairman and chief executive of Elphinstone, said: "The project in unlikely to happen in its original form."

Gavin Angel, director of City Lofts St Vincent added: "It is difficult to proceed with a project of the type envisaged in the current economic environment."

Reports yesterday claimed City Lofts is in talk with its funders, New York-based Lehman Brothers, to find an alternative solution for the 1.4-acre site on St Vincent Street at India Street.

However, it was claimed that Lehman Brothers is now reluctant to advance as much funding as originally planned.