Battersea Power Station's collapse into administration could trigger a bidding war for the derelict London landmark that closed nearly 30 years ago.

The 40-acre site in south west London, valued at £500m in October, will be put up for sale after a high court judge placed four subsidiaries of Battersea's holding company into administration on Monday. They failed to repay £324m of debt owed to Lloyds Banking Group and Ireland's National Management Asset Agency.

Administrators Ernst & Young have taken control of the Grade II listed red-brick building, which featured on the cover of Pink Floyd's 1977 album Animals. The lenders lost patience with the holding company's owner, the loss-making Irish property firm Real Estate Opportunities. Moreover, Hong Kong developer Victor Hwang, who sold the power station to REO for £400m five years ago, has called in a £178m vendor loan.

Last year REO won planning permission for a £5.5bn revamp of the former power station that would have created 3,400 homes and 15,000 jobs. But it failed to find an investor to take on the debt and fund the scheme, despite reaching late-stage discussions with around four companies. A deal with the Malaysian property group SP Setia fell through because the creditors rejected the terms.

Lloyds said: "From the outset we have been determined to secure a buyer who will kickstart the regeneration of Battersea Power Station and we have done everything possible to give the owners both the time and financial support to achieve this. However, after several months of discussions and still no acceptable offers on the table, administration is the only means we have to ensure that a sales process is put back on track. Without a financially stable owner, the site's future remains unclear and that's a situation we want to avoid."

The start of a formal sale process for the site, which has been blighted by failed development schemes, is expected to open it up to other bidders. Chelsea football club has hired developer Mike Hussey to draw up plans for a new stadium at the Battersea site and it is thought Setia remains interested. Other possible bidders include British property developers such as British Land and Berkeley and private equity firms including Blackstone.

Alan Bloom, joint administrator at E&Y, said: "Battersea Power Station is an iconic building and the associated parcels of land under administration are attractive assets with a great deal of development opportunity. With such a large piece of prime real estate development land there are many stakeholders and during the administration process we will be working very closely with all parties."

The collapse of REO's plans endangers a wider project to regenerate the area and build an extension of the Northern Line from Kennington, with REO having pledged to contribute £203m. Keith Garner of the Battersea Power Station Community Group, which had opposed the Irish company's plans, called for the power station to be returned to the public sector, with repairs to be funded by the Heritage Lottery Fund.

"For the Battersea Power Station Community Group it is just another 'new beginning' as the fourth developer limps off stage to boos and jeers," the group said on its blog.

REO's purchase of the site in 2006 was backed by Treasury Holdings, owned by Irish property tycoons Johnny Ronan and Richard Barrett. Their failure to revamp Battersea is the latest in a long list of shattered pipe dreams. They first envisaged transforming it into a theme park, led by John Broome, then chairman of Alton Towers and one of Lady Thatcher's favourite businessmen.

Battersea's architect Sir Giles Gilbert Scott's other power station, Bankside, has fared better and houses Tate Modern.

Developer Mike Brown, who works with property tycoon Nick Leslau and bought St Katharine Docks in London in June, this month ruled out bidding for Battersea Power Station. It has been described as a "poisoned chalice" and Brown agreed that it is "a very difficult scheme to make work". He said: "Whoever builds it has to sort out a listed power station, that's a fixed cost. It's a five to 10-year scheme."