The source told the AJ that city planners did not consider the General Market Building - on the west end of the complex - worth saving and were happy to see it replaced by KPF's proposals.
Their major concern, the Corporation mole said, was to ramp-up office space in the capital by approving a redevelopment of the site.
The source added that Corporation bosses also favoured the contentious KPF scheme, which is opposed by Prince Charles, because it would provide an opportunity to strengthen an existing Victorian tunnel running below the site.
However, if the scheme is given the green light by planners, it will almost certainly face a public inquiry as it is so controversial.
The revelation that the scheme will be backed by the City has come as a shock to conservationists campaigning to save the 1883 Horace Jones building.
SAVE Britain's Heritage chief Adam Wilkinson told the AJ he will demand that the decision be called in and will again urge culture secretary Tessa Jowell to prompt deputy prime minister John Prescott to save the building.
Thornfield's planning application excludes the Red House Cold Store, which was listed by the Department for Culture, Media and Sport in March.