The practice has drawn up plans showing how the 1959 building could be retained as part of a commercially viable scheme.
The plans represent a direct challenge to corporation-backed proposals to demolish the Modern building and replace it with a 44-storey tower designed by David Walker.
Barbican residents and conservationists alike have been up in arms over the plans to take down the building, which was not listed with the rest of the estate in 2004.
The building was developed before the rest of the Barbican estate and includes a fire station, coroner's court, office of weights and measures, civil defence school and mortuary below the walkway.
Developers, campaigners and the City of London are now awaiting a government decision on whether to grant the site 'immunity from listing'.
But Assael's work approaches the dispute from a different angle, looking to prove that it would be possible to develop the site profitably without sending the bulldozers in.
In addition, the City's brief for the site calls for new concert facilities for the local Guildhall School of Music.
Assael's plans suggest that Milton Court could be used for the music schools extension, while an adjacent site could be used for a mixed-use tower. Unsurprisingly, the Twentieth Century Society has welcomed these ideas with open arms.
'This is a gross overdevelopment and we're convinced that the city's brief can be satisfied without pulling down Milton Court in the process', Eva Branscome of the Twentieth Century Society said.
'Assael Architecture has been able to put together an alternative scheme: it would build within the courtyard of the former fire station that was a part of the original use.
'In addition to the existing building, and on top of the new facilities for the music school, 3,250m 2of residential space can be created within the new drum-shaped glass structure,' she added.