Renzo Piano's skyscraper, which will be Europe's tallest building, may provide a shot in the arm for London – or be merely a symbol of Qatari financial muscle

Slicing through the air above the dank and dripping Victorian tunnels by London Bridge is a new symbol of extraordinary confidence.

The glinting Shard of Glass has become the tallest building in Europe, rising higher than Canary Wharf's main tower, Frankfurt's Commerzbank and the Ostankino television tower in Moscow.

The 310-metre-high (1,017ft) building is scheduled to open in June, in what is forecast to be a continuing economic slump. But, experienced from the highest apartment on the 66th floor, thoughts of Britain's stagnation are obliterated by the mind-boggling views.

From the cavernous double-height living room more than 200 metres up in the air, the city of eight million people looks like a toy town. The London Eye becomes a fairground attraction and HMS Belfast a model boat. The twin stadiums – Olympic and Wembley – feel within touching distance. Trains inch along like millipedes into London Bridge station, while to the east the Thames curves out to the sea.

In certain weather all this is above the cloud deck. The spectacular views will next year go on sale to the highest bidder when apartments could fetch tens of millions of pounds each.

In all, there will be 27 floors of offices, three floors of fine dining restaurants, an 18-floor, five-star Shangri-La hotel with a spa, and 10 palatial apartments, each on average seven times bigger than a semi-detached home. A four-storey public viewing area is being built starting on the 68th floor which is likely to cost around £20 to access. The developer is even considering renting out the very highest room on the 78th floor for high powered conferences and political talks – summits at the summit.

"We could send Europe's top politicians up there and not let them down until they solve the euro crisis," said Irvine Sellar, the building's developer.

The architect, Renzo Piano, has mooted an alternative use as a meditation suite and is said to be keen the space should not become a playground only for the super-rich and powerful.

But how does all this, rising beside some of the poorest wards in the country, add up in Britain's listing economy? It is notable that so far no office tenants have signed up, although the developers say they are in talks with several and are being selective. The answer may lie in its ownership - the Shard owes its existence to a power play by a gas-rich kingdom more than 4,000 miles away.

From spring 2009, when construction began, Qatari wealth poured into the project. As the global economic crisis forced builders to down tools on sites across the UK, around £1.5bn – mostly from the Gulf – bankrolled the Shard.

Two of the apartments span two entire floors each and are expected to become London homes for members of the Qatari royal family. The Shard – 80% owned through the country's central bank – is now the jewel in the crown of the emirate's growing London estate, which also includes Harrods, the American embassy building in Grosvenor Square, and Chelsea Barracks.

The Qataris insist they are simply diversifying their investment holdings. But observers of Gulf politics believe there is a diplomatic purpose and regional one-upmanship at play. For example, some Kuwaitis and Emiratis are said to be jealous that Harrods, their favourite London shop, is owned by Qatar.

It was not meant to be like this. In 2000, when the Shard's silhouette was first sketched on the back of a Berlin restaurant menu by Piano, the project was wholly in the hands of Sellar, a former Carnaby Street trader, and his business partners. London's skyline was rising on a tide of easy credit and buoyant property prices. Lord Foster's gherkin-shaped tower for Swiss Re was about to be built in the City and plans for a cluster of taller towers – the "cheesegrater", the "walkie talkie", the "helterskelter" – were being drafted.

A planning inquiry followed the unveiling of Piano's design, which he charmingly said was inspired by the spires of London's old churches, and John Prescott, then deputy prime minister, gave his approval in 2003. But when it came to erecting the building, Sellar and his partners could not raise the construction finance because of the global financial crisis.

Qatari investors bought 80% of the project in January 2008, when it was valued at £2bn.

"The UK is a dear country to us," said the Qatar ambassador to London, Khalid bin Rashid bin Salim al-Hamoudi al-Mansouri. "We have been investing in this country before and after the crash. Our investment is a long-term investment. We don't need cash money now. This comes from a strategy of diversifying our economy over 10, 20, 30 years. We think the UK is the right place to put our investment. The UK is a strategic partner with our country."

The governor of Qatar's central bank, Sheikh Abdullah bin Saud al-Thani, has been more explicit about the diplomatic potential of the acquisition. He said he was confident the Shard would become "a symbol of the close ties between Qatar and the UK".

Dr Christopher Davidson, an expert in the politics of the Gulf at Durham University, said the Shard played a part in Qatar's programme of "soft diplomacy" with countries such as the UK and US that provide it with security guarantees.

"The invasion of Kuwait is still fresh in the memory of rulers in the Gulf and being invaded for your petrochemical wealth remains a nightmare," he said. "Qatar is in a tight spot between Saudi Arabia and Iran and its very survival rests on the west's guarantee. The thinking goes that if someone invades a country that has the highest skyscraper in London, then surely the UK should come to the rescue."

For Davidson, the Shard is in the same category as Abu Dhabi's purchase of Manchester City Football Club. "It is high-profile and won't necessarily turn a profit, but the benefits are non-pecuniary," he said.

Such talk about hidden agendas for the building makes Piano uncomfortable.

"This is not about money," he said. "It is about surprise and joy. This is about the way cities should go. They should stop and we should not go beyond the green belt. If you do this by going vertical that sends a message about conserving land. The building is not about arrogance and power but about increasing the intensity of city life."

He compared the project to the Pompidou Centre in Paris, which he designed with Richard Rogers in the mid-1970s. It turned the model of the fine art gallery inside out, placing the building's innards – its ducts, pipes and structure – on the facade.

"Architecture is not neutral, it celebrates something," he said. "When we built the Pompidou Centre it celebrated rebellion against the idea that culture should be intimidating. The Shard will celebrate community, the sense of the city, the sense of exchange. I think the building will become loved in London because it is not arrogant. Normally towers are not loved because they shut down at 6pm and you have a black glass block. This is not about money or power. It is about surprise and joy."

While many Londoners have already taken the building to their hearts, some locals are puzzled by their new neighbour and are struggling to understand its economic rationale.

"None of it hangs together and to me it seems commercially absurd," said Russell Gray, owner of the Tanneries, a small business complex created from restored Victorian warehouses close by. "But that doesn't matter if what you are after is a latter-day pyramid celebrating the arrival of the Qataris on the world stage."

Sellar couldn't disagree more and believes the building is the kind of counter-cyclical investment the UK economy needs. "If we want to get out of this malaise then this is the sort of project that should be done," he said. "We think it is a great image. It says, 'This is London, this is the Shard and we can kick sand in the face of the Eiffel Tower.'"

More than 2,000 16- to 24-year-olds in Southwark not only have no work, but are also not in education or training. The council is hoping to use £4.4m obtained from the developer in the £15m planning gain agreement to transform this small army and others into "a supply of enthusiastic, job-ready, local young people and adult jobseekers".

There is hope that people could train at Southwark College as beauticians to work in the spa at the hotel, as fitness instructors for the gym, and as florists, shop assistants, security guards, secretaries and office managers, although council papers reveal that "there is no obligation on the tenants and businesses in the completed development to provide job opportunities".

So far the council can boast that "up to the end of September, the key output is 40 local people into jobs in the building".

"There has been a failure of imagination," said Nick Stanton, a Liberal Democrat and former leader of Southwark council. "There should be something in this building that the community uses on a daily basis instead of just walking around it. There should be something like a library in it … one of the frustrations I had as leader was the inability to link a big project like this to local outcomes."

Tony Travers, director of the Greater London Group at the London School of Economics, said it was a "tower of power and riches" in a poor borough. "It points to the paradoxical nature of property development in cities such as London. In order to bring about transformation it is necessary to accept gentrification. It is inevitable the arrival of a sharp piece of global capitalism is an odd incursion into a borough that is still authentic old Victorian London."

The appearance of the building has created what Travers calls a "new mental geography" of the capital. For example the presence of the Shard makes suddenly obvious what every London taxi driver already knew: that the quickest way from Westminster to the City is via the South Bank.

Lord Prescott, who approved the tower in the face of stern opposition from English Heritage, has watched it "growing all the time" from his flat in the Parliament View complex by Westminster bridge.

"It was a difficult decision that I was faced with about high-rise buildings along the Thames," said the former deputy PM. "I thought this one was interesting. The Shard was in a part of London on the South Bank that needed to be developed as well. From what I have seen of it, it will achieve that. I thought its design was very striking and significant and part of modern cities and on the South Bank, whereas before the thinking was that high-rise buildings would be in Canary Wharf. Were we simply going to locate them there or would there be a regeneration argument for locating them on the South Bank?"

Over the river in the City, the Corporation of London appears miffed by the Southwark upstart. It has urged the London mayor, Boris Johnson, to prevent the Shard being used as a precedent by other developers to disregard protected viewing corridors that restrict development around St Paul's, the Tower of London and Westminster Abbey.

Piano is unperturbed by criticism it is too dominant on the horizon and says "the building disappears into the sky".

"This is the most important moment when you realise what the building will be like in the city," he said. "I think it is what I wanted. It is going to be sharp. It is not going to take away light. It is a building that will reflect the humour of the weather because the shards are not vertical, they are inclined. It will reflect the ever-changing process and colours of the sky."

Sellar, for his part, is sure the building will become a new icon. "People will feel proud," he said. "This is London. This is the Shard."