Rumored for months but never confirmed publicly until now, Google’s ambitious expansion plans in Kirkland have been scaled back for the foreseeable future.

The news came from Peter Wilson, Google site manager for its Kirkland offices and keynote speaker at a Bellevue Chamber business lunch at the Bellevue Hilton Feb. 12.

The company, which opened its first Seattle area offices in Kirkland in 2004, originally announced the expansion plans in 2007 when the city approved a 195,000-square-foot, three building office development built by SRM Development on Sixth Street South.

Wilson addressed the chamber on adopting new business practices to stay competitive in a virtual marketplace of increasing online Internet sales, but interest focused on Google’s expansion plans in the real world and thereby aiding the local economy. Civic leaders had hoped a large expansion by the company would bring more well-paid jobs to the area and act as a rising tide for other companies and business interests in the area, such as real estate and retail.

The offices are largely finished except for the interior space, which will be furnished as Google prepares to consolidate over 500 employees in Kirkland into one location by the end of the year, said Wilson. Measured by employees, the company is one of Kirkland’s largest. But the challenges of the market in a recession forced Google to slow down a hiring spree that until now had doubled the size of the company’s local workforce every year.

“As we enter this recession, we need to be prudent about how we manage our costs,” Wilson said. “I started to have trouble trying to find work for all of these people.”

He said the search-engine giant will continue hiring in the “high single-digits” to “low double-digits” for the year and occupy the majority of the office space, while one of the buildings is available for lease. The lease listing by officespace.com in November last year confirmed suspicions by many that the company had begun to apply brakes on expansion.

According to Wilson, Google chose to open an office in Kirkland when two sought-after recruits refused to move to California.

The company plans to staff the offices with software developers and project managers working on company products and services, such as Google Earth and Google Video.