It has also said the market conditions had been very different in 2005 and further investigations found the building had been in a worse condition than first feared, further devaluating the site.

The front of the building, which dates back to 1859, was owned by Mr Wong and the 1950s warehouses at the back by developers Frenson.

Max Stone, a director of Frenson, who was not available for comment, has previously described the £600,000 payment as “derisory”, claiming the building is worth £3.2m.

It is hoped once the issue over the site’s value is resolved it will be easier for the council to find a partner to develop the site.

But is unclear what use will be found for the site.

Plans have previously been floated for a Chinese Museum to be sited in the building.

Local councillor Steve Munby, who is on the steering committee for the Chinatown museum project, said: “It would be a fantastic initiative if it could be delivered and put Liverpool Chinatown back on the world map.”

Leading opposition councillor Nick Small said: “This is a really important building, and something needs to be done with it.” He said the way the council had managed the project was unbelievable.

A council spokesman said: “This is a strategically important site in the heart of the city centre which due to the economic recession the private sector has been unable to redevelop.

“We can confirm the executive board is to consider a number of options aimed at securing the future of this important site to make sure it is redeveloped and does not remain derelict for years to come.”

A spokesman for Downing said: “We are involved in ongoing discussions with Liverpool City Council and for that reason it would not be appropriate to comment.”