JP Morgan is close to scrapping plans to build a £1.5 billion European headquarters in Canary Wharf, opting instead for the former UK premises of Lehman Brothers, media reports said.

JP Morgan is close to scrapping plans to build a £1.5 billion European headquarters in Canary Wharf, opting instead for the former UK premises of Lehman Brothers, media reports said, adding to months of speculation that the bank is thinking of axing the project.

Reports did not say, however, whether private banking functions of JP Morgan will be affected by any change of mind by the bank about its choice of headquarters.

There are concerns that the Wall Street bank’s decision to abandon building a new European HQ in London will demonstrate that international banks are worried about mounting UK regulations and higher taxes on wealthy individuals.

Moving all of JP Morgan’s 17,000 London-based staff would to the former Lehman Brothers tower in the centre of Canary Wharf would be less expensive than constructing a new building in that part of East London, according to the Financial Times.

The Lehman office space is at 25 Bank Street. It was built for the defunct US bank in 2004.

The construction of new, impressive buildings can sometimes be a bad omen. Bear Stearns erected a new building in Canary Wharf shortly before it was hit by massive losses in the credit crunch (later bought by JP Morgan).