Work could start next year on a second major development at the M32 gateway to Bristol.

Developers have confirmed that they are preparing to go ahead with the £300 million Dove Lane regeneration project in St Paul's.

But it is not clear whether a 40-storey "gherkin" skyscraper still forms part of their plans.

The 11-acre development site is just the other side of the motorway from Cabot Circus and the idea is for it to include an architecturally stunning flagship building as well as a mix of flats, houses, offices, nightclubs, bars, restaurants, shops and open space.

Bristol-based architects RPS have drawn up plans for the towering 600ft (183m) building, as striking as the Swiss Re gherkin in London.

But developers Places for People say nothing has yet been ruled in or out: the most important thing is for the development to be what the people of St Paul's want.

Mary Parsons, group strategic director with Places for People, said: "Dove Lane is a fantastic development opportunity and Places for People is totally committed to taking it forward into delivery as part of our continued strategy of developing and managing large-scale mixed use neighbourhoods.

"Our aim is to create not only ground-breaking design but a safe and sustainable area for local people, while at the same time carefully integrating the development into the unique character and fabric of St Paul's. Over the coming months, we will be launching a number of consultation events to share our ideas with the local community, in the lead-up to a full planning application in early 2010."

The Dove Lane project began in the early 2000s when Bristol-based company PG Group, a company which focuses on social and community-related developments, bought the former English Corrugating Paper site and some neighbouring plots.

Consultations were held in the spring of 2007 on three schemes for the site, which is bordered by Newfoundland Way and St Paul's Park and includes Dove Lane, Wilson Place, Wilson Street and Cheapside.

One option included the skyscraper, which would be the joint fifth-tallest in the UK and would dwarf the 20-storey Castlemead tower in Lower Castle Street, while the others were lower-rise buildings.

PG Group has pulled out of the project to pursue other interests.

However, it will keep an interest in St Paul's – it intends to develop a site next to the M32 service station, possibly for an office block or a hotel. Father Gregory Grant, PG Group founder, said it was simply a case of "eggs in regeneration baskets".

"We are a comparatively small team and having the majority of our resources tied up in Dove Lane for the next four or five years without the time to create new regeneration opportunities was simply not the way we wanted to go," he said.

"We discussed the situation as a team and concluded that having created the stimulus for a major change for the good in St Paul's, we could now move on to find fresh challenges in pastures new."

Places for People, which has been involved in Bristol for 30 years as Bristol Churches Housing Association, is now ready to move ahead with the project, which it says could be the biggest single inner city regeneration scheme that Bristol has ever seen.

Spokesman David Mills said: "The Dove Lane vision is for a beautifully and sympathetically designed place inspired by the vibrancy and spirit of the colourful locality it will have grown out of; a place like no other in Bristol, which perfectly blends the benefits of city centre living with the informality and intimacy of a long established neighbourhood.

"One key factor will be the need to provide the mix of homes, business and social facilities including restaurants, bars and other places of entertainment for the whole community."