A residential conversion specialist would be “enthusiastic” to buy a former bank site overlooking the River Dee but says Lloyds Banking Group appears to prefer an offer from the University of Chester.

Manchester-based PJ Livesey Group says its bid for the Queen’s Park site was rejected but they remain keen to pursue a “high quality” housing scheme for up to 34 units should Lloyds change its mind.

There are rumours the former call centre site has already been sold and could become the university’s new business school. But the University of Chester and Lloyds Banking Group are remaining tight-lipped about talk of a deal.

The university says any proposals would be “subject to the commercial sensitivity afforded to any other business” but has previously dismissed claims the bank site could be used for student accommodation.

Steve Alcock, PJ Livesey’s land and estates manager, said: “We made an offer in the summer for the site but at the same time the university made an offer. We have been told Lloyds-HBOS’ preference is for the university offer.”

He has no idea whether a deal has been struck but presumes “the university and Lloyds are in discussions” about how to work through their proposal with all the stakeholders.

However, Mr Alcock believes the most appropriate use for the site is residential and said it seems “a bit odd” the university option is holding sway.

“The planners might have an overarching desire to bring in education there,” he suggested.

Under the PJ Livesey plans, the original Capital House building overlooking the river would be retained and converted into apartments. The more modern building, perpendicular to it, would be demolished and redeveloped with detached houses.

He added: ”We feel ours is the most sensitive approach. We would retain the historic building. It’s got a stunning interior already and we would retain that. It’s been there for the best part of 80 years but around that we would create the right environment to set the building off within Queen’s Park.”

Mr Alcock, who said residents and councillors should be involved in developing any plans, did not rule out the possibility of opening up the underground bunker complex associated with the site’s military past but stressed it would “have to be feasible”.

The firm’s previous schemes include conversion and new build work, with schemes at Bostock Hall near Northwich, Kingsley Park near Kingsley and a current project at the former Mostyn House school in Parkgate.

University of Chester spokeswoman Gemma Sproston said: “Should the university consider expanding its property portfolio, such proposals would be subject to the commercial sensitivity afforded to any other business and, where appropriate, to the statutory consultation associated with the planning process.”

Lloyds Banking Group spokeswoman Priscilla Garcia Wittig declined to comment on rumours the site had been sold to the university, saying: “I cannot confirm anything about it.” Asked whether the bank site was still for sale, she responded: “No comment.”

Earlier this year, plans for 33 dwellings by Redrow and Lloyds were rejected at the planning committee on design grounds but Redrow had been expected to come back with a revised scheme. However, Redrow recently revealed it was no longer interested in developing the plot.