THE STATE development agency for Dublin's docklands is to postpone for at least a year the €200 million U2 Tower project at Britain Quay.

The Dublin Docklands Development Authority (DDDA) is expected to announce the delay today, citing deteriorating economic conditions.

The Geranger consortium - backed by U2's members, developer Paddy McKillen and Seán Mulryan's Ballymore Properties - was selected by the agency a year ago to build the 180m (591ft) tower.

Work had been due to start this month on the building, which is designed by architects Foster + Partners - the practice of renowned architect Norman Foster.

The building was to be home to a new recording studio for U2, and at 180m would have been 60m (197ft) higher than the spire on O'Connell Street.

In spite of the postponement of the project, Geranger remains committed to its involvement in the development.

The delay in the construction of the landmark building will come as a setback to the DDDA, three weeks after the High Court quashed fast-track planning permission for a €200 million development project by developer Liam Carroll at North Wall Quay.

Ballymore yesterday opened the five-star Kempinski Hybernska hotel in central Prague following a €27 million renovation and fit-out of the 17th-century listed building.

The hotel includes 75 rooms and suites.