Laing O'Rourke was this week locked in talks with the client of the £80m refurbishment of the St Pancras Chambers over its future role as contractor on the scheme.

A joint statement by the contractor and the client issued this week said the two “were involved in ongoing discussions over the construction of St Pancras Chambers”. The statement added: “Those negotiations are commercially confidential.”

Sources on the project claimed that Laing’s future on the scheme was in doubt due to a potential change in strategy by the client.

One source said: “The client is now talking about splitting the job into different parts rather than completing it all in one. So they are looking to start with the flats first and then doing the hotel.” The source added that the move had come as a shock to the project team. He said: “It came totally out of the blue.”

The scheme consists of turning the long disused grade I-listed hotel into a 245-bedroom hotel and 67 apartments.

Laing originally won the contract in February 2006, beating off rival bids from HBG, Wates and Kier. Work began on the job at the end of last year.

St Pancras Chambers, designed, by Sir George Gilbert Scott, was first opened as the Midlands Grand Hotel in 1876. After making a loss it was converted into railway offices in 1935 before closing in 1980 after failing fire safety checks.