Paddington Development Corporation pulls out of deal to sell crucial site to the Department of Health.

Plans for a £800m PFI hospital in Paddington, west London, were up in the air this week following a landowner pulling out of a deal to sell a crucial chunk of land to the Department of Health.

The Times reported on Saturday that a deal between landowner Paddington Development Corporation (PDCL) and the team behind the Paddington Health Campus had collapsed.

The newspaper quoted PDCL project director Howard Wright, who said: "Reluctantly, we have concluded that we should withdraw so that we may pursue our normal business."

Building first revealed the details of the controversial land deal, which was in a confidential index in the most recent outline business case for the project published at the end of last year, in January.

The favoured option was to pay upwards of £148m for the site, which was originally planned for a Richard Rogers Partnership-deigned office block. The deal attracted criticism from local MPs and was not thought to be favoured by Department of Health officials.

The Department of Health claimed the hospital campus, which is to house the St Mary and Brompton & Harefield hospitals as well as new premises for Imperial College, could still be built ont he site.