Government appears to have dropped its controversial multimillion dollar plan to buy the Swan Building in Hamilton.

The Royal Gazette revealed in December that a secret deal to purchase the Victoria Street property for $24.5 million was being hammered out between Cabinet and owner Sir John Swan.

A confidential Cabinet document was passed to this newspaper which said Deputy Premier and Finance Minister Paula Cox was against the plan and that the sale was due to be completed on April 1 this year.

Government failed in a court bid to get a permanent injunction to stop details of the memo being published and has made no public comment on the Swan Building since.

But former UBP Premier Sir John Swan, whose real estate company Challenger Banks is based in the Swan Building, told this newspaper last month: "There has been no development. I think it's off the table. Government said it didn't have the money to spend at this particular time.

"It has got so many commitments, it didn't want to take on another one."

The Cabinet document was leaked by a source who wanted the public to know about the negotiations because they believed Government had "no business buying a building" during an economic downturn.

The proposal to buy the Swan Building and relocate government departments there from July this year was put forward by Works and Engineering Minister Derrick Burgess. He said it would give Government annual rental savings of about $2.4 million.

The leaked document prompted Government to launch an immediate legal bid to suppress the information.

Puisne Judge Geoffrey Bell imposed an interim gag but quashed the injunction days later and rejected an application for a permanent ban.

Cabinet Secretary Marc Telemaque referred this newspaper to Works and Engineering Minister Robert Horton for comment yesterday, but he was off Island and could not be reached.