Donegal property developer Pat Doherty is in advanced talks to sell the former headquarters in London of the Conservative Party to the EU Commission and the European Parliament.

The likely deal comes exactly a year after Mr Doherty's company Harcourt Developments acquired the 1920s office block that served as Conservative Central Office for 50 years. Harcourt paid £30.5 million (then €45.7 million) for the Smith Square block and an adjoining building.

The transaction under discussion with the EU institutions includes only former Tory headquarters. Assuming final terms are agreed, the deal raises the prospect of the EU's officials in London working in the former seat of establishment power in British politics and, arguably, the home of euroscepticism.

Scene of the Tory party's greatest electoral triumphs - the building was the backdrop to Margaret Thatcher's three election victories - Central Office was also the site of plots, backstabbing and political scheming.

A spokeswoman for the European Commission in London acknowledged that talks were under way but declined to put a price on the deal.

Harcourt said: "It would be inappropriate to comment publicly on a private deal while negotiations are under way. A press release will be issued if and when the deal concludes."

While the value of the deal is not known, it was reported last year that the Tories stood to claw back 50 per cent of any gain in excess of £1 million over the original purchase price on a future sale of the property.

The Conservatives made £15 million profit on the Harcourt deal last February, enough to clear their debts. The party had moved out of the offices in 2003 but restrictions on a £1 per year lease from the 1980s meant it could not develop the building.

Offshore companies twice owned the freehold, including a British Virgin Islands company owned by unidentified Middle Eastern clients of Citibank. That group realised a £3.38 million profit when the Tories bought out the building with loans from AIB. The Tories repaid a £15.65 million loan to AIB in Belfast last March.