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The 360 London tower, designed by Rogers Stirk Harbour for developer First Base, won planning permission in September and Bovis had been widely tipped to land the deal. But Laing O鈥橰ourke has emerged as favourite to build the landmark tower, which includes a plaza and a home for the Southwark Playhouse theatre.

A source close to the project said: 鈥淲e鈥檝e been talking to Bovis about the job for at least six months, and we were about to start work. Now we鈥檙e talking to Laing O鈥橰ourke.鈥�

The move is notable because First Base is part-owned by Lend Lease, Bovis鈥� parent. Lend Lease won the 拢1.5bn contract to redevelop the Elephant & Castle area in partnership with First Base, although the 360 tower is a separate project.

Nigel Hugill, director of Lend Lease Europe, said when Lend Lease won the Elephant & Castle bid that Bovis would not be the automatic choice for every project.

Lend Lease and First Base are also working together on the Olympic village in Stratford.

Some of it goes our way and some the other way. That鈥檚 the nature of the business

Bovis Lend Lease source

It is understood that Bovis has done between seven and nine months of preconstruction work, although a formal agreement with First Base was never signed.

A Bovis Lend Lease source said: 鈥淲e do preconstruction for several clients. Some of it goes our way and some the other. That鈥檚 the nature of the business.鈥�

Richard Powell, director at First Base, said Bovis was still in the running for the scheme.

He said: 鈥淲e don鈥檛 want to compromise any discussions we may be having with other parties. We can confirm we have not yet made a decision on who will be the best firm to build 360 London; it may or may not be Bovis.鈥�

Demolition of the site is almost complete. The scheme is set to open in autumn 2010.