According to Reuters, the online retailer has not yet acquired any land for the project, which would make it easy to scrap its plans, the source said.

The person briefed on the matter said that Amazon was still working toward winning approval from New York officials and had not given up on the proposal, but was considering potential alternatives to New York.

Earlier, the Washington Post, which is owned by Amazon Chief Executive Jeff Bezos, reported that  executives had had internal discussions to reassess the situation in New York and explore alternatives. It cited two unnamed people familiar with the retailer’s thinking.

Amazon said it was working to engage with New Yorkers, but did not discuss whether it would change its plans.

“We’re focused on engaging with our new neighbors - small business owners, educators, and community leaders”, it said. “Whether it’s building a pipeline of local jobs through workforce training or funding computer science classes for thousands of New York City students, we are working hard to demonstrate what kind of neighbor we will be.”

In November, Amazon said it would branch out from its home base in Seattle with plans to create more than 25,000 jobs in two new developments.

The world’s largest online retailer plans to spend $5 billion on the developments in Long Island City in New York’s Queens borough, and in Arlington, Virginia, near Washington, D.C, and expects to get more than $2 billion in tax credits and incentives with plans to apply for more.

Amazon has mailed flyers to Queens residents touting the economic benefits of its New York expansion.

But some residents in the rapidly transforming Long Island City neighbourhood across the East River from mid town Manhattan’s skyscrapers have loudly opposed Amazon’s plan. They say they fear more crowded subway stations, an overburdened sewage system and rent increases that would drive out long-time residents.

A critic of the plan, Queens lawmaker Senator Michael Gianaris, was appointed to a state senate panel that has the power to block Amazon’s campus.

City council speaker Corey Johnson told local radio he is looking at subsidies for Amazon and that the plan is not yet final. One point of contention could be Amazon’s opposition to labor unions.

US Congresswoman Alexandria Ocasio-Cortez, whose district spans parts of Queens and the Bronx, has also slammed Amazon saying that it was time that everyday people should come together and effectively organize against the creeping overreach of one of the world’s biggest corporations.

In one sign of opposition, artists spray-painted Amazon’s logo - spelled “AMAZNO” - on streets near the proposed site.