Nakheel has offered investors in the stalled Palm Jebel Ali development alternative homes on other projects, casting further uncertainty over the future of the vast reclaimed island.

Some Dubai developers have encouraged home buyers on struggling projects to transfer their deposits to other developments that are nearer completion.

People who bought waterfront villas on Palm Jebel Ali, where prices have tumbled by about 45% from their peak in the third quarter of last year, are now being asked to transfer their investments to projects that include Al Furjan and Jumeirah Heights, which are both under construction.

The National