Developer Séamus Ross's Menolly Group is in a dispute in New York over air rights to a building which collapsed when a construction crane being used by another developer fell on the four-storey building, killing seven people.

Local reports state Menolly has told building owner Jean Squeri that she has no right to restore the Manhattan building to its original height because she had sold the air rights above it to Ross's firm.

MUS 1, the Menolly subsidiary, paid Squeri $2.25m for the air rights, the empty space over her building, in 2005, the New York Post said.

Menolly said Squeri was limited to constructing a new building one storey less than the original building height.