Gazprom has almost everything its own cities, its own airline, and even its own private army. It has nearly half a million employees, and the chairman of the board seems set to become the next president of Russia. If any company is synonymous with Russia's economic boom in recent years, it's the sprawling state-controlled gas monopoly, which pumps billions of dollars of revenues into the Kremlin's coffers each year.

Now, the biggest subsidiary of Kremlin Inc wants new headquarters to reflect its importance in the new Russia, and wants to build it in St Petersburg, home town of President Vladimir Putin, the chairman of the board, Dmitry Medvedev, Russia's probable next president, and Alexei Miller, Gazprom's CEO.

	ATALIA KOLESNIKOVA/AFP/GETTY IMAGES Gazprom's current Moscow headquarters

But the plans for the Okhta Centre, as the proposed complex is called, are more than a little controversial. Designed by Scottish architects RMJM, the centrepiece of the project is a 67-floor skyscraper that will be nearly 400m tall; a pentagonal glass needle that twists as it reaches for the sky, changing colour at different times of the day.

The project has provoked outrage among Petersburgers, who are furious that the low-rise skyline of the city they consider to be one of the most beautiful in the world could be blighted by such a huge modern building. Leading cultural and architectural figures in the city have also expressed their dismay at the project, as has Unesco, which has even gone as far as to suggest that St Petersburg's World Heritage status might be at risk if the skyscraper goes ahead.

The project's lead architect is Tony Kettle, who with his understated demeanour and soft Scottish accent exudes neither the charisma nor the inflated ego of many big-name architects. He is at great pains to point out that the proposed site for the project is out of the historical centre, and that St Petersburg is a city of spires, making the tower a continuation of the cityscape, rather than an aberration.

The architects claim that a series of doctored pictures were produced showing the tower looming menacingly over different parts of the city. The truth, says Mr Kettle, is that it won't be visible at all from Palace Square, the epicentre of the city and home of the Winter Palace, which houses the Hermitage Museum.

In fact, the building site is a few miles out of the centre, in an area full of abandoned warehouses and crumbling Soviet-era industry an area crying out for an urban regeneration scheme. The tower is just one part of the project, which will also contain a huge variety of public amenities and be the starting point for a new economic hub in the mould of London's Docklands. But the tower will be visible from many parts of St Petersburg, and a series of images displayed by the architects to show how minimal its influence will be are not fully convincing. The shots are reminiscent of "Where's Wally" sketches except that instead of spotting the stripy-jumpered Wally in the crowd, one has to spot the 400m-tall glass needle poking out from behind the pastel-coloured Baroque palaces. It might not be as prominent as some critics have claimed, but it certainly looks out of place.

Earlier this month, RMJM gave a presentation about the project, aimed at convincing the doubters that the skyscraper is not out of keeping with the city. But Francesco Barandin, director of Unesco's World Heritage Centre, is not convinced. "It's a visual intrusion on the landscape of St Petersburg," he says. "A 400m tower is excessive. It's a deviation from the history of the city a fully horizontal city."

St Petersburg was founded in 1703, when Peter the Great decided that a new, modern Russia needed a new, modern capital a "Window on Europe". Over the course of the 18th century a grandiose city of ornate Neoclassical palaces grew up around a grid of canals. Industrialisation and Communism did leave their mark on St Petersburg its outskirts are full of Soviet-era buildings but the centre remained untouched. This is a far cry from Moscow, where Tsarist grandeur, constructivist utopianism, shabby Brezhnev-era apartment blocks and new Russian kitsch can all be found on the same street.

"St Petersburg is the only Neoclassical city in the world that has survived intact," says Mr Barandin. "We have a chance to keep it that way why should we start altering it now?"

He says that it's too early to talk about what might happen if the building does go ahead, but that he "can't exclude" the possibility that the city's World Heritage status would be revoked. "I'm sure there are alternatives to this building," he says. "In architecture there is never one solution. You always have to work on alternatives."

But the final decision lies with the city's administration and planning committee, and the signs are that they are not considering any other options, but in stead are finalising plans to begin building work. They expect the skyscraper to be finished by 2010.

"At the start we thought the building was out of place in our city," says Boris Petrov, a member of the city's planning committee. "But then we understood that this would act as a springboard to regenerate a whole area, and became convinced we need this project. The period of discussion is over."

"We think that we'll start construction in May," says Nikolai Tanayev, the project's CEO. A ruddy-faced man with a swept-back rooster quiff and a dour monotonous voice, he used to be prime minister of Kyrgyzstan, where he is now accused of money laundering.

Tatyana Yurieva, a spokesman for Gazprom, says that the company is confident that the building will go ahead. "A lot of the top managers at Gazprom are from St Petersburg, and of course they want to return," she says. The only reason a final decision has not been taken sooner is that "dark political forces" were trying to jump on the bandwagon of protests about the tower undesirable in an election season. After the presidential elections in March, says Ms Yurieva, things are likely to get moving much more quickly.

Supporters of the tower say that the crumbling faades of St Petersburg's beautiful centre can only be saved with new investment. Local officials envision that the Okhta Centre will kick-start a huge revitalisation programme and that many other Russian companies will move their headquarters north from Moscow.

"St Petersburg is a city of 5 million people; it has to live and thrive," says Mr Kettle. "It can't be a time capsule like Venice."

A British contractor, working for Bovis, compared the project to London. "I worked on Canary Wharf and you can see the benefits it has brought. This is a fantastic project to rejuvenate a ruined area," he said.

Mr Kettle notes that some of the city planners had told him that the tower should be even higher. "They always want go over the top here," he says. "You have to remind them that restraint is sometimes good." "Restraint" is a word that he likes to use frequently, almost as though he is in denial that he is a man planning to build a colossal skyscraper in a low-rise city. "This is a very restrained building," he says repeatedly as he flicks through slides of previous RMJM projects, as if to prove a point that he is not simply a party-trick architect with an extravagant office to build.

He's sensitive to claims that his is a wild project imposed by foreigners that don't really understand St Petersburg and its history. Mr Kettle first came to the city in the mid-1990s, and was working as a consultant for Unesco on the preservation of the Hermitage. He talks with passion about the city, and remembers the mid-1990s as an extraordinary time. "I remember walking into the cellar of an old abandoned palace; there were these artisans who were making incredible stone carvings. They slept there, in this decaying ballroom, with water dripping from the ceiling and the whole building falling apart."

He's also full of anecdotes about the Hermitage. In the throne room, he says, there is a small hole above the throne itself, where throughout the entire rein of Catherine the Great a soldier would stand guard and point his rifle at the space in front of the seat, ready to shoot any intruders. "It was an amazing experience to work there," he says proudly. "I know things about that building that not many people know."

Ironically, it's Mikhail Piotrovsky, the director of the Hermitage, who is one of the sharpest critics of Mr Kettle's new project. "St Petersburg is one of the few cities in Europe where the historical centre has been fully preserved," says Mr Piotrovsky. "All the tall buildings in this city are churches. It doesn't seem very ideologically savoury to add the headquarters of a gas company to that."

Mr Piotrovsky says there are two options build the skyscraper, but five kilometres further out of the city, so that it's not visible from the centre, or keep the current location but lose the tower. "We definitely need a new part of the city that will be economically dynamic, but it's criminal to build it there," he says.

Comparisons with London, where buildings like the Gherkin and Canary Wharf have become an integral part of the cityscape, don't go down well. "We don't want the fate of St Petersburg to be like the fate of London, where the whole historical centre is completely destroyed," says Mr Piotrovsky. "When you look at what surrounds St Paul's now, it's a tragedy. London is the worst possible example for St Petersburg."