A number of developers are believed to be keeping an eye on the progress of talks between the council and Elsan, the Danish company which it contracted to build and operate the plant. Elsan's new owners, Danish Oil and Natural Gas, wish to change how the financing of the project and other elements of the deal.

However, the council will not consider offering the 13.6 acre site even if these talks collapse. "The city council would seek, by way of public procurement, another service provider if agreement is not reached, " a spokesman told the Sunday Tribune.

It also claimed that no developers had approached the council expressing an interest in the site. But a spokeswoman for Ballymore Properties admitted that the site was a "no-brainer" in terms of its potential for a mixed use development.

"It's so close to the city and Sandymount and the sea. I think that it could well be the next big phase of the Docklands redevelopment if the council changed its mind, " she said. "If Dublin Port did relocate, there could be all sorts of prospects."

She emphasised, however, that Ballymore did not have any interest in the land at the moment. But she said: "we're always looking at opportunities and if a good opportunity emerged, Ballymore would look at it".

Informed sources have said, however, that the one difficulty facing any potential development, including the incinerator, is the area's poor transport infrastructure.

However, it appears that any mixed-use development would have considerable political backing. The T�naiste Michael McDowell is a strong opponent of the incinerator and his spokeswoman said he would "certainly be interested in viewing any alternative development proposal".

"He would like to see a combination of residential and commercial development for the site but not any industrial units, " she said.