The proposed developer, the Carvill Group has this week revealed it was planning to enter a Creditors Voluntary Arrangement to avoid financial meltdown.
The Carvill Group confirmed at the weekend that "due to economic pressures it was entering discussions with creditors" to get an agreement for the repayment of part or all of its debts overtime.
The group, whose other projects in Northern Ireland include the Woodbrook eco-village in Lisburn, the Embankment apartment complex in Belfast and the redevelopment of Newry City centre, also has operations in Scotland, England and Germany.
The £600m Sirocco Quay project plans for the construction of 5,000 apartments on the 15-acre site by the River Lagan.
It also includes an international convention centre, four hotels, childcare facilities, a care home, a supermarket and 1800 parking spaces.
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Sinn Fein Pottinger Representative Niall Ó Donnghaile and South Belfast MLA Alex Maskey have both expressed concern about the long-term use of the former Sirocco Works site in Belfast.
It is now anticipated that building work on the 10-year project will be on a less ambitious scale.
Mr Ó Donnghaile said: "Obviously the Carvill Group employ a large amount of people, not least within the construction industry, who are already suffering in the current economic climate, therefore I have no doubt this news will cause that sector greater strain and concern. It is with disappointment and regret that we learn of the company's current difficulties.
"While our party has had issues with some of the proposals for Sirocco Quays, what cannot be disputed is its potential for regeneration and economic development. Sirocco has the potential to throw open the east side of the river lagan and extend the city centre beyond its current confines," he said.
"It also has the potential for the development of much needed housing, leisure and sporting provision as well as better transport infrastructure within this part of the city."
Alex Maskey added: "The possibility of economic stimulation on this site still remains vital and realisable; an area of such size and potential must not be permitted to go to waste. Our party has made clear for sometime our desire to see any development utilised to the fullest for the benefit of the surrounding communities."
Costs Reviewed
It has also emerged today that another top building firm, the Patton Group, has been forced to reduce costs across a number of areas of the business.
A statement to a local newspaper said: "As has been widely documented, the construction industry is facing unprecedented challenges.
"Having conducted a comprehensive review of our business, regrettably we have no option but to reduce our costs across a number of areas."
(BMcC/KMcA)
