Office space in the Shard will not be taken up by Transport for London (Tfl), it has emerged.
Tfl had planned to move to the under-construction development from May 2012 under a deal provisionally agreed in 2005.
The public transport operator was to let 200,000sq ft of the Shard at £38.50 per sq ft. This equates to over 30 per cent of the total space available.
However, the move has been stymied by the sale of the lease to London Bridge Quarter, which is now looking for another tenant in the hope they will be prepared to pay a substantially higher rate.
The news comes amid a surge in rental values for prime office space in the City, which now stand at an average of £44 per sq ft, according to property company Knight Frank.
Last year, the average rental price per sq ft was £44 and is expected to skyrocket to £67 for prime space by 2014.
London Bridge Quarter is a joint venture that unites Stellar Property Group with the State of Qatar.