Westfield's plan to turn a London shopping centre into its third mega-mall in the capital faces renewed resistance after two key Whitgift Centre stakeholders teamed up to discuss their own options for its future this week.

The wrangle involves a growing split between the mall's freeholder and two leaseholders over the appointment of a developer for the aging Croydon asset, and is a key element in whether Westfield can expand its London footprint.

The Australian developer, the world's second largest by market cap, said it had entered an exclusive arrangement to redevelop the Croydon site with freeholder the Whitgift Foundation charity on November 11.

Royal London Asset Management said neither it, nor Irish Bank Resolution Corp (IBRC), formerly Anglo Irish Bank, had been consulted on the plans. The pair own or control 75 percent of the leasehold between them, with the Whitgift foundation holding the remaining 25 percent.

Royal London and IBRC held a meeting on Thursday to discuss their own separate plans about redeveloping the 1.2 million sq ft mall and the possibility of inviting other developers to submit proposals, three sources familiar with the talks said.

Neither the Whitgift Foundation nor Westfield were present at the Thursday meeting, one of the sources said. The redevelopment of the centre requires all three stakeholders to agree on a development partner.

There are several other parties (besides Westfield) that are equally capable of delivering a good quality scheme, the source said. Contrary to media reports, no developer is yet in talks with the two leaseholders, a second source said.

Westfield and IBRC declined to comment on the reports of a meeting between the two leaseholders while Whitgift Foundation was unavailable for comment.

A Royal London spokesman told Reuters on Friday that the selection of a developer would be the result of an open and transparent process.

Westfield was likely trying to use its exclusivity arrangement with the freeholder as leverage to bring about a deal with the other two leaseholders, two property agents familiar with the site told Reuters.

The Whitgift Centre has not undergone a major facelift since it was built in 1970. The complex ownership structure has made it difficult to agree a deal, the two agents said.

News of an alliance between the two leaseholders dispels the notion that Westfield has been chosen to revamp the 41-year-old shopping centre.

Last week, at the Develop Croydon 2011 conference London mayor Boris Johnson was reported to have said, I am delighted that Westfield has decided to launch its third centre in London in Croydon.

Westfield already part owns the Stratford City mall in east London near the site of next year's Olympic Games, and the Westfield London mall in west London.

The Whitgift Centre's Croydon location was under-served by high quality retail and leisure facilities, Westfield said in its November 11 statement, adding a major retail scheme had the potential to serve over three million customers.

(Reporting by Brenda Goh; Editing by Andrew Macdonald)