DAC Beachcroft has postponed its planned move into new Birmingham premises for at least 12 months while it sizes up more cost-effective alternatives.

The firm had agreed to take up 58,000 sq ft at 2 Colmore Square in Birmingham's business district. but last week pulled out of the deal with landlord Nurton Developments due to concerns over costs.

The firm will remain in its existing office at Nine Brindleyplace while it weighs up its options in the city.

Chief executive of DAC Beachcroft Claims Bill Paton said: "Both the Claims Solutions Group board and the firm's main LLP board agree that in the current economic climate it is important that we continue keep a tight rein on our property costs. After much consideration, we feel that we should take more time to explore our options in Birmingham more carefully.

"Although this decision may lead to some additional short-term costs for the firm, our main goal continues to be the acquisition of a cost-effective office in Birmingham for the long-term.

"DAC Beachcroft remains committed to providing a pleasant, sustainable and cost-effective home for all our people in Birmingham and we look forward to seeing our long-term investment plans in the city begin to take shape."

DAC's Birmingham office currently houses 272 fee-earners and 392 staff.

The news comes a week after the firm cut five fee earners from its employment and pensions team following a review of the practice.

DAC's financial results, announced last week, showed a fall in PEP for 2012-13 to £284,000 from £321,000, while turnover rose by 14% to £188.2m.