The British government is facing a $40 million tussle with the governor of Jakarta over plans to sell the site of the former U.K. embassy, which occupies a premium plot in the heart of the Indonesian capital.
British diplomats moved to new, bigger premises in the city in June and the Foreign and Commonwealth Office had hoped for a windfall from the old embassy, which U.K. officials believe is worth about $40 million to developers.
(Read more: Protest planned at Australian embassy in Jakarta)
But the plan risks being derailed by Joko Widodo, the Jakarta governor and a front-runner for the Indonesian presidency, who wants to turn the site into a public park.
"The Jakarta government has us over a barrel because it controls the permitting for construction," said one U.K. official in Jakarta. "If they let it be known they won't allow an office tower or apartment building to be built there, we won't be able to sell it for a good price."