The World Trade Center's leaseholder is willing to make concessions in two key areas that are holding up the redevelopment of the devastated site.

Larry Silverstein, the property magnate who took control of the twin towers for $3.2billion a year ago, said in an interview he wanted to restore all 10m sq ft of office space he previously controlled.

But he acknowledged growing public concern that plans for the site were overly commercial.

'In the end, we'll do what is best for New York.'

A decision to accept less office space would also affect his multi-billion-dollar insurance dispute that began in the aftermath of the September 11 terrorist attacks.

Mr Silverstein is engaged in a legal fight to double the insurers' losses to more than $7-billion, arguing that because two aircraft hit separate buildings, he can make two claims and recover twice his $3.55-billion coverage.

Swiss Re has the largest liability in a consortium of more than 20 insurers all suing to cap their losses.

Mr Silverstein has settled with two Bermudan insurers.

Herb Wachtel, Mr Silverstein's lawyer, said on Wednesday that settlement talks with Swiss Re would be affected by the cost of redeveloping the site.

'The drivers are what is realistically needed for rebuilding and an assessment of how strong the legal case is.'

In his first public comments since officials unveiled six preliminary proposals for the 16-acre site last week, Mr Silverstein said the Port Authority of New York and New Jersey, which owns the land where the towers stood, had not yet contacted him about building less office space.

'If there is a determination by the Port Authority [that less space is required], we'll look at it of course. Whatever we have to do, we'll do.'

While there is a glut of office space in the city today, Mr Silverstein insisted he would find tenants for the 10m sq ft he wants to build. 'There will be a need for this space,' he said. 'If we don't build it, New Jersey and others will.

A judge has set an August 8 deadline for the insurers and Mr Silverstein to present a settlement proposal.

The insurers have so far not budged from their view that September 11 was one 'insurable occurrence'.

Mr Silverstein and Mr Wachtel said they thought the case would still go to trial.
 
Financial Times