TALKS have begun to ensure Ecclesiastical stays in Gloucester after the insurance firm called off its move to the city's Docks.
The company, which employs 600-plus in the city, has announced plans to halt its head office relocation and has terminated its agreement with Gloucester City Council to build a new headquarters in the Docks.
Ecclesiastical has blamed the challenging economic environment and an unsuccessful bid to secure funding for the construction of the new building.
The project has already cost the company, based in Brunswick Road, in excess of £1million.
Under the original agreement, the company would have moved on to Southgate Moorings by 2015.
The site off Southgate Street is currently being used as a temporary car park.
Steve Wood, UK managing director for Ecclesiastical, said: "We have made every effort to take our plans forward over the last few years and it is very disappointing to find ourselves in a position where we simply aren't able to progress with this project any further.
"Unfortunately, we have been defeated by the economic conditions and the extremely challenging office construction market in the region.
"The funding options presented to us by potential partners are simply not viable for our business and would result in Ecclesiastical committing to an unfavourable property deal.
"We have, therefore, made the difficult decision to put our relocation plans on hold for the foreseeable future.
"This is clearly a disappointing decision for Gloucester City Council and the city, but even though Ecclesiastical will not be moving to Gloucester Docks as planned, we remain committed to the city and its community as we have been for the last 30 years."
City council leader Paul James said he was disappointed but understood why the decision was made.
"However, the most important issue is that Ecclesiastical remain committed to the city and we will work with them to ensure Gloucester continues to meet the needs of their business," he said.
"The Southgate Moorings site is an important part of the Docks and we will reflect on how it can best support the continued regeneration of this area in the future."
Chris Oldershaw, chief executive of Gloucester Heritage Urban Regeneration Company, said: "We are naturally disappointed with the recent announcement, but remain optimistic that Ecclesiastical will develop Southgate Moorings for their new headquarters when the national economy is stronger."
There are around 200 parking spaces at Southgate Moorings. The city council wants to create a new temporary car park on the Barbican site, off Ladybellegate Street, which would have made up for the loss of Southgate Moorings.