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The London School of Economics will be seeking Government assurances on funding before taking up an approach as possible future occupant of the contentious St Bartholomew's Hospital site.

The LSE was approached by the Government-appointed taskforce chaired by Sir Ronald Grierson, chairman of GEC International, which is handling the disposal of the site - expected to become available around the end of the century. The school commissioned an initial survey from architects Shepheard, Epstein, Hunter.

John Ashworth, director of the LSE, said: "We haven't done a detailed study but the site would provide us with the space we need. I feel we need a site commensurate with the needs and the stature of the school and, although we were unable to persuade the Government of our case for County Hall, that need has clearly impressed itself upon them."

Memories of the failure to secure County Hall, which went to a Japanese hotel developer, coloured the discussion when the school standing committee met this week. In the absence of detailed plans no precise costing is available for the Bart's site, but figures of up to Pounds 200 million have been mentioned.

Other potential difficulties include a judicial review of the consultation process leading to the decision to close the hospital, which will not take place until January 23 and may be lost or become subject to appeal. The Bart's site also incorporates two ancient monuments and two grade one listed buildings. The LSE hopes to receive a response before its court of governors meeting on December 7.