Port Authority officials called developer Larry Silverstein “greedy” yesterday after negotiations over a development plan for ground zero were scuttled late Tuesday night, raising the specter of a legal showdown over the future of the World Trade Center site.

After officials indicated they were close to a compromise involving a major realignment of development rights at ground zero, including the transfer of the Freedom Tower to the Port Authority, Mr. Silverstein floated a proposal minutes before Governor Pataki’s midnight deadline that caused Port Authority officials to abruptly walk out of the room, ending negotiations indefinitely.

Yesterday, the state’s leading development official, Charles Gargano, said the developer was negotiating “totally in bad faith” and that unlike in traditional real estate transactions where developers accept risk, Mr. Silverstein had sought to transfer “most of the risk, if not all of the risk, on the Port Authority.”

Mr. Gargano, the vice chairman of the Port Authority, said Mr. Silverstein’s proposal “was $1 billion more than we were willing to offer in our plan.”

The developer denied the accusations of greed.

“What would give me the most profit, excitement, and fulfillment in my professional life is to get these buildings built,” Mr. Silverstein, 74, said.

Mr. Gargano said the state expects Mr. Silverstein to begin construction next month on the Freedom Tower, the 1,776-foot skyscraper that is widely considered the least desirable of the planned buildings. Otherwise, he said, “We want him to move out of the way.”

A legal battle is likely to break out between Mr. Silverstein and the city and state over the allocation of Liberty Bonds for the ground zero redevelopment, real estate analysts said. Mr. Silverstein says the bonds were authorized by Congress for the purpose of rebuilding ground zero, for which he controls a 99-year lease. The city and state say they are entitled to distribute them in any way that would benefit Lower Manhattan.

When Mr. Pataki awarded Silverstein Properties the state’s allocation of $1.67 billion of Liberty Bonds in December, the governor said it was conditional on Mr. Silverstein negotiating a deal with the Port Authority by the March 14 deadline. Mr. Silverstein has long insisted that the tax-exempt financing is necessary make the project financially feasible.

Flanked by a pair of lawyers at a press conference yesterday in the lobby of his completed 7 World Trade Center tower, Mr. Silverstein said he was “saddened by the Port Authority’s conduct and their statements.”

The developer said he was prepared to move forward on construction of the Freedom Tower, and that he thought that Mr. Pataki would make $1.67 billion in Liberty Bond financing available for that construction.

The governor, previously an ardent supporter of the developer and eager to begin building on the site more than four and a half years since the terrorist attacks, signaled yesterday that his support is wavering. In a statement, he said Silverstein Properties “betrayed the public’s trust and that of all New Yorkers.”

“We cannot and will not allow profit margins and financial interests to be put ahead of public interest in expediting the rebuilding of the site of the greatest tragedy on American soil,” Mr. Pataki said in the statement. “Our ardent desire to move forward expeditiously must not be used as leverage by Larry Silverstein for his financial demands.” The Bloomberg administration has withheld its allocation of $1.67 billion in Liberty Bonds to compel Mr. Silverstein to renegotiate his current lease with the Port Authority. City Hall says the developer cannot properly finance the current plan and will run out of money after building only two towers in four or five years, leaving a hole at ground zero and the city with few good options.

Yesterday, Mayor Bloomberg issued a statement that said: “It is time for Silverstein Properties to temper its individual interests and focus on what’s best for the New York City.”

The president of the Real Estate Board of New York, Steven Spinola, said he is optimistic that there is still an opportunity for both sides to sit down and settle their differences.

“If not, then its court,” Mr. Spinola said. “I don’t know if that’s the worst situation for Larry or the Port Authority, but it certainly is the worst situation for Lower Manhattan.”

According to a master plan created by architect Daniel Libeskind and agreed upon by Messrs. Silverstein and Pataki in 2003, the developer would build the Freedom Tower and three additional commercial towers on the site of the fallen twin towers.

During Tuesday’s negotiations, representatives from both sides said that progress had been made toward reassigning the development rights at the former World Trade Center site. Mr. Silverstein’s rights of building and leasing the Freedom Tower were to have been relinquished to the Port Authority, which owns the site, and Mr. Silverstein would still build and lease the three commercial towers along Church Street, believed to be the most desired by potential commercial tenants. The transfer of building rights would have involved Mr. Silverstein’s sharing some of the more than $3 billion in insurance proceeds related to the September 11 attacks with the Port Authority, and a reduction in the ground rent, now more than $10 million a month, that Mr. Silverstein pays to the bi-state agency.

Mr. Gargano said Mr. Silverstein asked for “totally unacceptable reductions” in ground rent. Convinced that the Port Authority and the governor needed to move expeditiously on the Freedom Tower, Mr. Silverstein at the last moment floated a proposal containing demands that were just as high as when negotiations began, he said. “They thought we were going to back down,” Mr. Gargano said.

At his press conference, Mr. Silverstein expressed his desire to get back to the negotiating table immediately and said he did not know for certain why the Port Authority walked out on negotiations on Tuesday night or why the 90-day window had closed without a deal being struck.

“Perhaps the Port’s leadership made a conscious decision to take these negotiations to the wire. Perhaps there are internal disagreements within the Port Authority that led to their delays,” Mr. Silverstein said, adding that it was “inexcusable” for them to walk out before a deal was reached.