Deutsche Bank is set to sue Allianz and AXA in a dispute over one of its New York offices, which was damaged in the 11 September 2001terrorist attacks.

Deutsche Bank maintains that the office, which is adjacent to the World Trade Centre site, should be demolished. However, Allianz and AXA insist it can be repaired.

The German bank wants insurers to pay the costs associated with tearing down the old building and constructing a new one.

Deutsche's lawsuit will ask Allianz and AXA for $857m (£533m), which is half the $1.7bn (£1bn) listed in its insurance policy.

The lawsuit said: "The implosion of the South Tower generated tornado-force winds that distributed fine dust . . . into every nook and cranny of 130 Liberty Street through [a] 15-storey gash and approximately 1,700 broken windows.

"The collapse of the North Tower shortly thereafter spewed more dust into the air and 130 Liberty Street. During months of clean-up work at Ground Zero ... winds transported more dust and smoke from the World Trade Centre debris into 130 Liberty Street through the gash and broken windows."

An Allianz statement said: "The dispute is over whether the building is a total loss or not. What they want to do with the building is entirely in their hands."

AXA declined to comment.