Sir Robert McAlpine is set to grab the £150m Milton Court scheme, one of the biggest contracts being tendered in the City of London market

The contractor is hotly tipped to beat rival Mace for the 35-storey block, officially renamed the Heron scheme, according to two sources close to situation.

Brookfield and Skanska submitted bids, but it is understood a low price from McAlpine will clinch the deal.

The scheme, which is designed by David Walker Architects, contains almost 300 residential apartments above a 625-seat concert hall for the Guildhall School of Music and Drama.

It stalled in summer 2008 amid worsening market conditions, and its revival is the latest sign of life in the London development market.

The tower has been scaled back since its original design, with the height reduced by about 28m to 112m after concerns were expressed about views from the South Bank.

It is understood final bids were due in earlier this week despite reports that McAlpine was the firm favourite.

A spokesperson for developer Heron dismissed the reports that McAlpine was set to land the contract as “utter rubbish”.

He said: “The tender documents won’t be reviewed or discussed for at least two weeks.”