NEW YORK - The future of rebuilding the New York site destroyed by the September 11 attacks was thrown into disarray on Wednesday when talks on who should build what broke down amid recriminations.

With construction of the emblematic Freedom Tower due to start in a month, the site's landlord, the Port Authority of New York and New Jersey, ended talks with developer Larry Silverstein on how to carry out the US$7.3 billion ($11.45 billion) master plan.

The Port Authority accused Silverstein of being greedy and acting in bad faith, saying the two sides were nearly US$1 billion apart when talks fell apart around a midnight deadline on Tuesday night.

Silverstein said he was shocked and disappointed, telling a news conference, "We felt we were making progress. A basic framework of a deal was as at hand."

New York Governor George Pataki set a March 14 deadline for the two parties to settle who would be responsible for which parts of the plan, saying a deal was needed for the state to release US$1.7 billion in tax-exempt Liberty Bonds to Silverstein.

Plans call for four office towers on the site known as Ground Zero, along with two others just off the 6.48ha parcel on the southern tip of Manhattan, to replace the 930,000 square metres of office space destroyed on September 11.

Officials are especially eager to build the Freedom Tower, which would be among the tallest buildings in the world at 541m and replace the Twin Towers in the Manhattan skyline.

Silverstein, who signed a 99-year lease on the property two months before the September 11 attacks, vowed to start construction on the Freedom Tower a month from now even though the basic framework agreement called for him to hand off the Freedom Tower to the Port Authority.

The Port Authority and New York City officials doubt Silverstein can finish the project even with the Liberty Bonds. Silverstein maintains he is fully financed with the Liberty Bonds and $4.6 billion in insurance proceeds.

The Port Authority threatened to halt further talks, saying Silverstein issued a last-minute proposal that offered no concessions and was unwilling to take on any risk. It challenged Silverstein to start construction in April or get out of the way.

"There will be no continuing of negotiations with Larry Silverstein and his group until they put something on the table that is in the public interest," Charles Gargano, vice chairman of the Port Authority, told a news conference.

"They were showing bad faith ... It was clearly an indication of the greed involved," Gargano said, while promising no delays to the memorial or transport hub planned for the site.

Silverstein disputed virtually every contention made by the Port Authority, and one of his aides said the financial gap between the two sides was only about 3 per cent of the US$1.5 billion value of the lease.

"I can't tell you why government does what it does. In the private sector, this doesn't happen," Silverstein said. "If they are sincere about making a deal, there's nothing to prevent us from going right back to the table and getting it done. It's just that simple. And we're ready to do it today."