Responding on its own forum to the rising swill (surely, 'swell'?) of information that Heavenly Sword developer, Ninja Theory, is breaking into small bits forcing it to move premises having fallen out with Sony over Heavenly Sword 2, one staffer with the tag Peonic has written:

"Not much I can clarify here dude - our involvement with HS ended when we decided we didn't want to develop the sequel. I've got no idea what the guys upstairs are / aren't working on.

The bit about us moving offices is true - but the idea that the move has got something to do with "bitterness" between us and Sony is utter BS. The move has been something we've been working on for ages - and it's because the offices we have currently are a bit cramped, so we're moving to a much bigger space where we'll have more room for toys...."

Get the info from the horse's mouth using this link here.

As for Heavenly Sword 2 itself being canned, there is no solid information to prove or disprove that yet.