Larry Silverstein’s accusation that Mayor Bloomberg ‘s plan for ground zero amounts to “Soviet-style confiscation” is a signal from the 74-year-old developer that he will fiercely defend his contractual rights to rebuild on the World Trade Center site.

The comment, part of a four-page statement issued yesterday by Silverstein Properties, escalates the fight over the future of Lower Manhattan. Mr. Bloomberg has claimed that Mr. Silverstein doesn’t have the money to complete the construction envisioned under the site’s master plan. The mayor has sought to reallocate to a developer other than Mr. Silverstein the Liberty Bonds created by Congress to fund rebuilding, and Mr. Bloomberg is pressing for apartments instead of some of the office space slated for ground zero.

Silverstein Properties’ statement disputed the mayor’s claim that development could proceed more quickly if the developer ceded his rights for Tower 3 and Tower 4, large commercial buildings planned on the eastern edge of ground zero, across Church Street from the Century 21 department store.

“The notion that increased government involvement will speed things up does not pass the smell test,” the statement read.

Mr. Silverstein rejected the mayor’s offer to compensate him with reduced monthly rent payments to the Port Authority, the site’s owner.

The developer’s statement said Mr. Silverstein “has continued to pay approximately $10 million a month in rent to the Port Authority every month since 9/11, even though the buildings he leased are gone.”

Mr. Silverstein’s missive is the latest in a round of sparring between the developer and the city as they negotiate over the remaining $1.7 billion in tax-exempt Liberty Bonds. Mr. Silverstein has planned to use those bonds in conjunction with $4.6 billion in insurance proceeds to rebuild 10 million square feet of office space at ground zero.

In December, Governor Pataki allocated the state’s remaining $1.7 billion in Liberty Bonds to Mr. Silverstein. The governor attached a 90-day deadline for the developer to come to an agreement with the Port Authority. That deadline is March 14.

By holding a mandatory public hearing yesterday, the city moved a step closer yesterday toward giving $50 million in Liberty Bonds to developer Joseph Moinian. Mr. Moinian wants to build a 53-story luxury hotel and condominium just south of ground zero. The city’s Industrial Development Agency could vote on the allocation in its March board of directors meeting. City officials have told The New York Sun that the agency has received other Liberty Bond applications, but refused to say who submitted them or for what they sought to build.

On Tuesday, Mr. Bloomberg publicly predicted that Mr. Silverstein would “run out of money” and leave the task of rebuilding ground zero unfinished unless a new arrangement was struck. The mayor’s comments were based on a financial analysis produced by the city’s development agency, the Economic Development Corporation.

The report predicted that Mr. Silverstein was likely to build only one or two of the proposed five towers at ground zero before defaulting. Even if Mr. Silverstein defaults on the entire site he would net $106 million, the report said, and that if he holds on to the Freedom Tower and one other building, he would stand to walk away with $565 million.

Yesterday, Mr. Silverstein sought to correct what the statement called “misleading and at times outright wrong” statements by city officials and contained in the city’s financial analysis.

The statement disputed the claim that Mr. Silverstein would run out of money, saying the city failed to include the city and state’s allocation of Liberty Bonds.

“The City has authorized Liberty Bonds for office towers in Midtown, luxury apartment buildings during a residential boom, and even a power plant in Queens. If the City refuses to release the same financing for the office towers destroyed on 9/11, it is the City – not Silverstein – that is preventing the project from being completed,” the statement read.

Mr. Silverstein said in his statement that he would begin construction on Towers 3 and 4 when the Port Authority completes its preparation of the site, expected to be finished in 2008.

“Any other developer who came in after Silverstein would likely proceed more slowly than Silverstein,” the statement read. “Without insurance proceeds, that developer would have to borrow more money and raise equity that would require a substantial return on investment.”

The developer’s statement also said that the city’s forecast for the downtown commercial real estate market was overly bearish in predicting ground zero commercial rents at about $35 to $40 a foot.

“This assumes the business environment will actually deteriorate over the next few years despite unprecedented infusions of private capital and federal dollars for Downtown,” the statement read.

Both the developer and the mayor appeared yesterday at an event announcing the development of a new children’s mental health facility at NYU.

Mr. Silverstein told reporters that the sites the mayor wants to reallocate are “superbly sited for office buildings.”

The developer said they are sites with abnormally large footprints that would accommodate demand from financial or communications companies for large trading floors or newsrooms. In addition, he said that Towers 2, 3, and 4 will stand closer to the proposed transportation hub than will the Freedom Tower. The transportation hub will connect 14 lines of mass transit, making it ideal for commercial buildings.

Minutes later, the mayor said the city was holding out its Liberty Bonds to make sure the project conforms to its interests. Specifically, Mr. Bloomberg said he preferred to build the towers simultaneously so construction will not ensnarl Lower Manhattan for 15 years. He said the eastern towers – Towers 2, 3, and 4 – should be built faster to better connect ground zero to the rest of the city. He also continued his call for a mixed-use development that includes a residential component to create a more vibrant community operating 24 hours a day and seven days a week.

Mr. Bloomberg reiterated some of his pessimism for renting out the proposed 10 million square feet of office space.

“If you go back and you remember, it took 13 years from when the World Trade Center two towers were built before it was filled, and it took roughly 20 years before it was filled at market rates, and that was before you had two planes tragically take 2,800 lives,” Mr. Bloomberg said. “This time it would be even harder to do it.”

Governor Pataki, who was also at the NYU event, signaled his support for Mr. Silverstein.

In the summer of 2001, Mr. Silverstein won – with a $3.2 billion bid – a 99-year lease from the Port Authority on the World Trade Center. The deal was part of a Pataki administration effort to privatize government assets.