Chinese developers who plan to transform a part of the Royal Docks in a £1 billion deal have applied to rent space at a building occupied by Newham Council.

Mayor Sir Robin Wales is expected to approve the grant of a ten-year lease of Building 1000 at Newham Dockside tomorrow (Thursday) to ABP (London) Investments Ltd. It would see the firm occupy part of the fourth floor of the East Wing of the building, sharing it with the council which bought it for £110 million four years ago.

It has not been revealed how much the company will pay the council. Last year, Newham Council denied it was planning to sell the premises.

The council moved most of its departments from East Ham Town Hall in Barking Road in 2009, leaving the premises for community groups and a handful of council services.

ABP intends to transform vacant land next to Newham Dockside into a £1 billion state-of-the-art business district, which will create 20,000 jobs, forge new trade links with China and secure billions of pounds of inward investment.

A spokesman for the council said the proposal to lease office space to ABP is considered a good deal as it would generate rental income which, together with savings in rates and service charge payments, could help safeguard frontline services for residents.

He said space in Newham Dockside is available because some staff dealing face-to-face with residents will be moving to the new Customer Service Centre and Library in East Ham next month.

Chris Pope, Newham’s executive director for resources and commercial development, said: “Financial pressures on the council from government cuts mean it is now more important than ever to get maximum value from our property assets.

“We will continue to look for opportunities to save and make money and that includes renting out office space we are not using in Newham Dockside. The proposal being considered by the Mayor is in line with our strategic approach of maximising commercial income to offset funding cuts and protect frontline services for residents.”

In May last year Mayor Sir Robin Wales, Mayor of London Boris Johnson and ABP Board chairman Mr Xu Weiping, revealed details of the proposals to transform the 35-acre site at Royal Albert Dock.

Sir Robin said: “We welcome ABP’s ambitious vision for the Royal Docks. This proposal will bring investment from abroad and unlock future development. It will also create benefits for local people by providing thousands of new jobs and further enhance the waterfront.”

If the ABP rental deal is approved, it will mean 76 per cent of the Building 1000 is council occupied and 24 per cent by other tenants who currently include global watch brand Swatch and CityJet airline company.