CANARY WHARF said yesterday that it would bid to develop a string of projects across London after beating off competition from British Land, the FTSE 100 property company, to build Wood Wharf, a giant development project next to its East London estate that could be worth £2 billion when completed.

The Docklands developer will work in partnership with British Waterways, a public corporation that manages about 2,000 miles of rivers and canals, and Ballymore, a private Irish company, to transform industrial land into “Europe’s newest and most vibrant business district”.

It will be the first site that Canary has developed outside its original site and it is the first time the company has agreed to work in a joint venture.

A spokesman for Canary said the docklands developer was actively seeking fresh development opportunities outside its core estate and would consider further joint ventures.

Although British Land will rue missing out on the chance to be lead developer on the site, it already has a significant stake in the Canary Wharf business, ensuring that it will not lose out altogether.

British Waterways said yesterday that it would now enter detailed talks with Canary Wharf and Ballymore to establish a new joint venture company for the development. These talks are expected to be completed by March. The project will then need to be signed off by government ministers before it can proceed.

The masterplan for the site, which was prepared by ATIS Real Weatheralls, the commercial property consultant, and Nick Kuhn, the architect, envisages five million sq ft of development, equivalent to five Canary Wharf towers.

This comprises 3.6 million sq ft of commercial space including offices, shops and restaurants, about 1,500 homes, a hotel and serviced apartments, and a new canal link and basin.

The site was originally used for timber storage and ship repairs, but following changes to the docks in the 1980s it could no longer be used for shipping.

Earlier in the bidding process the scheme attracted the attentions of some of the UK’s biggest developers, including Grosvenor, the Duke of Westminster’s property company, and Stanhope, the property developer chaired by Sir Stuart Lipton.

Paul Reichmann, the founder of Canary Wharf, triggered controversy when he launched a competing bid against Canary Wharf, which at the time was still paying him a £500,000 a year salary, even though he had stepped down to pursue a takeover bid for the Docklands company.

The project is by far the biggest ever undertaken by British Waterways.