One of Britain's biggest property-developing firms collapsed into administration today, in another sign of the dire state of the economy.

Grahame Whateley founded Castle-more Securities in 1973, building it up to a developer with a £1 billion property pipeline. He blamed its demise on the banking sector.

Castlemore companies have been behind a number of large recent development sites across London, including the landmark 40 Holborn Viaduct, a 178,000 square foot office block overlooking Holborn Circus. It is thought to have been involved in other high-profile projects like the large Staples Corner retail park near Brent Cross.

The company would not comment on which properties were affected by today's administration.

Whateley said: “We have been caught in a financial crisis not of our making, and in the maelstrom brought about by the meltdown in the property market and paralysis of the banking sector. We have done everything we could to prevent the current situation arising. These factors were totally outside our control.”

Only a year ago, Whateley, 65, disputed the seriousness of the economic climate. “If you want to call this situation a recession, it will be my fourth,” he said. “Whatever the financial climate, we are still developing. It is essential to tell the banks what you want and control the situation without banks controlling you. That is extremely important.”

Chief lenders Lloyds TSB and HSBC put the company into administration, Castlemore said in a statement. They were expected formally to appoint administrators Grant Thornton and PricewaterhouseCoopers respectively today.

Whateley today said he now intends to retire, adding: “It greatly saddens me to do so under these circumstances.” But he will be continuing as chairman of Local Shopping Reit, a London Stock Exchange-listed company that owns local retail property, as well as his non-executive role with stockbrokers Arden Partners, quoted on AIM.

The Holborn Viaduct building, thought to have recently been completed, is largely unoccupied after law firm Mishcon de Reya last year walked away from talks to make the site its headquarters.