Real Estate Opportunities (REO), a company which is linked to developers Johnny Ronan and Richard Barrett, has been dealt a devastating blow after losing control of the Battersea Power Station project which it bought at the height of the property boom.

The decision to take the project from REO leaves Nama with huge influence over the Battersea area along the River Thames, as fellow Irish developer and Nama debtor Sean Mulryan is developing the nearby Nine Elms site.

In addition, it is understood a deal between REO and Nama covering other debts is not close to agreement and further talks will be needed before Nama signs off on any final debt plan.

Lloyds Banking Group and Nama went to London's High Court yesterday to wrest control of the site from REO, owner of 54% of the firm controlling the site.

Treasury Holdings is the majority shareholder of REO and was also the "development manager" of the iconic power station site, for which it was paid a fee. It is not clear if the Treasury contract will continue under the new deal.

Ironically as REO lost control of the project, Mr Mulryan was meeting the deputy lord mayor of London, Edward Lister, in an attempt to advance the Nine Elms site.

A key retail tenant, Waitrose, has expressed an interest in becoming part of the development.

Nama for its part said it was a "difficult decision" to apply for administration, but hoped the step would progress the sale.

Roman Abramovich, owner of Chelsea Football Club, is among the potential buyers.

Ernst -amp; Young will try and sell the site. The site stopped producing electricity from coal in 1983 and several other developers have tried to develop the site since the 1980s.

However, Nama and Lloyds had demanded repayment of £324m of debt on the site, triggering the court hearing. REO had been trying frantically over recent days to pull off a last-minute deal for the site without success.