Merrill Lynch has broken off talks with Silverstein Properties to relocate to a new 2.5m sq ft global headquarters on the site of the World Trade Center.

Discussions between Merrill Lynch, Silverstein and the site’s owner Port Authority of New York and New Jersey have ended ‘over economic terms’, Port spokesman Steven Colman said today.

`We are confident in the long-term viability of the office market at the site, and continue to make progress on construction of all of the projects,’ said Coleman.

Merrill had been expected to move its headquarters from the World Financial Center in Lower Manhattan to the 71-storey tower currently under construction.

Silverstein, owned by American real estate billionaire Larry Silverstein, has leased land from the Port Authority to develop three towers at the 16-acre Ground Zero site.

It was reported in the New York Times that the Port Authority had been trying to negotiate a deal with Merrill whereby it would lease the land to Merrill for around $510m (£254m).

The deal would have involved Silverstein selling its development rights to Merrill with an asking price of $340m ((£170m).

The asking price was too high, the New York Times said, citing anonymous Port Authority and Merrill sources.

Merrill has previously been in talks with Vornado Realty Trust for a 3m sq ft headquarters tower at the site of the Hotel Pennsylvania in Manhattan’s Midtown but talks broke down.

Merrill’s lease at its current headquarters runs until 2013.