The developer behind a new landmark building on the prominent Masshouse site in Birmingham has been released from the obligation of providing affordable low cost apartments.

Instead Manchester-based Nikal must pay the council’s housing department £250,000 to cut the cost of homes elsewhere in the city.

In 2007 the developer was initially told to provide 15 low cost apartments out of the 167 planned for four buildings on the site, alongside offices, a hotel and shops.

After negotiations with the housing department Nikal has agreed to buy out the obligation at the site in the Eastside area of the city.

Half of the inflation-linked £250,000 will be paid when a third of the new flats are full and the remainder when two-thirds are occupied.