The site has been the subject of disagreement, after Berkeley thought it had bought the plot – which lies between the City Hall and Tower Bridge – only to discover that the council owned half.
Now the two sides have agreed, in principle, to sign a deal on 31 March to work together on a proposal for the site.
A source close to the long-running scheme confirmed that the ‘entirely new proposal’ could kibosh Ian Ritchie’s proposal for Berkeley to build the eight cylinder-shaped towers.
The source said: ‘It is a new development – maybe Ritchie will be involved. But as for the towers... Southwark has always opposed them.’
At the time of writing Ian Ritchie Architects was unavailable for comment.