Redundancies are reported to be in double figures but construction is continuing and the cutbacks are said to have nothing to do with financial problems facing developer City Lofts.

Instead, they are being attributed to the knock-on effects of the credit crunch on building contractors working for City Lofts, which last week called in administrators from accountants and business consultants Ernst and Young.

St Paul's Tower has been billed as the "most exceptional apartment block in Sheffield", with interiors designed by Sir Terence Conran and views stretching for miles.

Work started on the 316-apartment development in May last year and it is due to be completed by the end of this year.

Andy Topley, director of physical regeneration at city development company Creative Sheffield, said: "The City Lofts development is designed to be an iconic building, reflected in the fact that two-thirds of the apartments are pre-sold.

"This development is being treated as a special case and has not been directly affected by City Lofts Group entering into administration because City Lofts Sheffield was formed as a separate company and it has access to separate, stand-alone funds to complete the Sheffield project.

"We have been told that no- one has been laid off due to City Lofts Group entering administration.

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"Creative Sheffield is working with City Lofts Sheffield Ltd to complete this landmark building. It remains a positive and exciting landmark for the city."

Ernst and Young partners Maggie Mills, Angela Swarbrick and Charles King have been appointed administrators of the City Lofts Group.

An application has been made for the trio to be appointed administrators of the group's main subsidiary, City Loft Developments, which in turn owns separate companies carrying out individual developments.

Administrators say they are trying to make sure individual developments such as those in Sheffield and at Half Tide Dock in Liverpool, continue to be built, in order to maintain the value of the group.

The companies carrying out both developments have not been placed in administration and new directors have been appointed to strengthen their boards, says Ernst and Young.

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