Dan McEwan, of McEwan Group, said yesterday the company could not complete the project "unless there was support from the public sector".
The project's problems stemmed from the collapse of finance companies, evaporation of investor confidence and the global market meltdown, he said.
His "preferred option" would be to transfer "the ownership, management and profitability" of the project to the public sector.
The company was willing to make available plans, its Hilton contracts, apartment sales and commercial leases.
In June and July, the company had begun looking for a buyer for the hotel or for a joint venture partner and Mr McEwan said 35 overseas "investor operators" had responded.
"This market has now completely dried up, as the major international hotel funders, Lehman Brothers and Babcock & Brown, have collapsed and the confidence in this product has deteriorated."
The company says it has sold at least 25 of 34 apartments in the building and five weeks ago Mr McEwan told the ODT he was adamant construction would begin in January.
Yesterday, he said "negative rumours" circulating around Dunedin about the project and its promoters and developers had been part of the problem.
The ODT on Monday published criticism of the company by lawyer Geoff Mirkin, representing four clients who had invested in the project and wanted detailed financial information about the project.
Yesterday, Mr Mirkin said the investors wanted "the existing project to go ahead somehow" and he was concerned they might lose out if the project was sold.
He is continuing to seek financial information on behalf of his clients.
"I've got no personal interest. I'd love to see the hotel go ahead. I'm a Dunedinite. I've got no personal issue here. Why doesn't he just give us the information? Simple."
Dunedin Mayor Peter Chin said the council had not considered the possibility of buying the project but it was an idea he did not "personally favour at all".
"I don't believe that it is appropriate because of the risks involved in a venture such as this at the present time."
Mr McEwan suggested the Otago Regional Council could base its headquarters in the building rather than build a new $18 million headquarters next to the steamer basin.
Regional council chairman Stephen Cairns said he had met Mr McEwan in his role as a real estate agent acting for a potential buyer but he was not representing the regional council, which is committed to the steamer basin site.
The council had considered using the post office building some years ago.
