Plans to transform a derelict farm into the regional headquarters of a major bank have collapsed as experts warn the "credit crunch" is scaring developers off building new offices.

Lloyds TSB, currently based in Gloucester Place, employs 1,800 people in Brighton and had planned to move to Patcham Court Farm, at the junction of the A23 and A27, which has been vacant for 15 years and was the proposed site for a park-and-ride scheme.

Councillor Brian Oxley, leader of the council, said: "The first bid is not going to happen but we have been talking to other people intensively to get somebody on board."

Lloyds withdrawal from the scheme forced the developers to pull out leaving Brighton and Hove City Council to look for a new buyer.

The project fell through, according to a council report, because of "timing issues".

But council papers, to be discussed on Thursday, also reveal that uncertainty in the market has led to many large firms putting on moves on hold.

DTZ, a global real estate adviser, has warned the council that the office property market - or occupational market - is suffering from the credit crunch.

The council report reveals that when original bids were made in 2006 the property market was achieving record profit levels.

It reads: "Today there is a much different picture. There has been significant uncertainty with many funds opting a wait and see approach which is likely to last until the beginning of quarter one 2008.

"The occupational market is still holding up but there have already been some signs of large corporates putting their requirements on hold. "

Tony Mernagh, executive director of the Brighton and Hove Economic Partnership, warned that 2008 could be the toughest year for businesses in the city for the last ten years.

Last November an international marketing campaign was launched to find a suitor for the land, attracting 26 bids. Shorlisted offers ranged from £1 million to £5 million and the councilís policy and resources committee decided to opt for the Lloyds TSB bid.

Since then the scheme has floundered and officers had contacted three of the shorlisted candidates to resubmit proposals.

Councillors will be asked to decide which scheme is given the green light at a policy and resources committee on Thursday.

Green councillor Bill Randall is pushing for the site to become a Community Land Trust, a non-for-profit organisation which builds affordable housing and communal facilities, while Lib Dem councillor Paul Elgood is calling for the property to be turned into a model farm for school visits.

Councillor Gill Mitchell, leader of Brighton and Hove's opposition Labour party, urged the council to press ahead with proposals given the darkening financial outlook, adding that said she would still like to see a park-and-ride scheme on site.

A spokeswoman for Lloyds TSB said: "We keep our premises under constant review but we would not comment on individual discussions."